Goldman Sachs profit surges amid flurry of dealmaking

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Goldman Sachs reported a 66-percent surge in third-quarter earnings that swept past expectations on Friday, as Wall Street’s biggest investment bank rode a record wave of M&A activity that has also boosted profit for other big US banks.

The Wall Street giant headed by Chief Executive David Solomon, which generates a third of its revenue from its investment bank through lucrative fees from advising on deals, reported a surge in advisory fees, as large companies and financial sponsors embarked on a slew of transformative deals.

Net earnings applicable to common shareholders rose to $5.28 billion in the quarter ended Sept. 30, from $3.23 billion a year ago.

Earnings per share rose to $14.93 from $8.98 a year earlier. Analysts on average had expected a profit of $10.11 per share, according to the IBES estimate from Refinitiv.

Total revenue surged 26 percent to $13.61 billion in the quarter

Global M&A volumes have shattered all-time records, with advisors struggling to cope with transaction volumes never seen before.

David Solomon

Deals worth more than $1.5 trillion were signed by the world’s biggest investment banks in the September quarter, with Goldman comfortably topping the league tables for worldwide M&A advisory, as per Refinitiv data.

The league tables rank financial services firms on the amount of M&A fees they generate.

Overall financial advisory revenue jumped 225 percent to $1.65 billion, while underwriting revenue surged 33% to $1.90 billion.

Goldman Sachs

Goldman’s investment bank had its second-best quarter ever, with revenue of $3.70 billion, driven by strength in advisory and underwriting fees.

The global markets business, which now houses the trading business and accounts for roughly 41 percent of overall revenue, reported revenue of $5.61 billion, up 23 percent.

Unlike rivals such as JPMorgan and Bank of America, Goldman has a relatively smaller consumer business, which has limited its exposure to loan defaults and allowed it to focus on investment banking.

With dealmakers the world over drowning in a flurry of deals, Goldman also cashed in big-time as companies rushed to raise capital, refinanced debt and sold new stock.

Shares of the investment bank were up nearly 2.5 percent in premarket trading.

Wilsonhttps://momentumcore.com
When Wilson was in school, he loved toying around with the latest gadgets and technology. He would often be seen fiddling with his phone or laptop in between classes, trying to figure out how they worked. This interest led him to start blogging about technology, where he shares tips and tricks with other people who are just as fascinated by it as he is.

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