Goldman Profit Jumps 45%; Stock Trading Set for Record Year

Solomon last month flagged a significant slowdown in revenue tied to equity and debt investments in its money-management unit, particularly as the bank pares back investing from its balance sheet. That revenue was $294 million, a sharp slowdown from recent quarters, including the more than $1.2 billion at the end of last year.

Net income jumped to $2.99 billion, or $8.40 a share. Revenue climbed 7% to $12.7 billion.

Return on Equity

Despite the winnowed focus in its business, the bank is still shy of its mid-teens return-on-equity target, having only hit that mark once in the past 10 quarters. In the three months through September, the New York-based firm posted a 10.4% ROE — a measure that tracks how profitably the bank invests shareholder equity.

The stock-trading unit logged revenue of $3.5 billion, its best showing since the first quarter of 2021. The firm credited significantly higher intermediation revenue in derivative and cash products.

Revenue from the fixed-income trading business slipped 12% to $2.96 billion, as it flagged lower revenue in rates and commodities. In August, the bank said the co-head of its commodities business, Qin Xiao, was leaving after just a few months in the role at a time when gains in that business have slowed.

Investment-banking revenue of $1.87 billion compared with analysts’ average estimate of $1.68 billion. Merger-advisory fees were $875 million. Goldman jumped out in front of JPMorgan Chase & Co. on that metric after falling behind its rival in the second quarter.

Goldman’s asset- and wealth-management business posted revenue of $3.75 billion, up 16% from a year earlier. Management fees climbed 9%. The bank reported $16 billion of fundraising in the alternatives business, mostly tied to credit-related strategies.

The consumer-platforms business, dubbed the bad bank within Goldman, recorded a 32% drop in revenue to $391 million, driven by the GM card exit and resulting in a pretax loss of $559 million.

(Credit: Bloomberg)