by Ken Sweet | The Associated Press
NEW YORK – Goldman Sachs’ profit jumped 60% in the third quarter as the deal bonanza that dominated financial markets this summer brought in hundreds of millions of dollars in fee revenue for the investment bank.
The New York-based firm said on Friday it posted a profit of $5.28 billion, or $14.93 per share, compared to a profit of $3.23 billion, or $8.98 per share, in the same period a year ago. According to FactSet, the results were much better than the $10.10-per-share gain that analysts were expecting.
Much of the jump in profit came from Goldman’s advisory and investment banking business, where the firm helps companies go public or buy out other companies. The firm brought in $3.7 billion in investment banking revenue last quarter, up 88% from a year ago.
The economic recovery after the pandemic has prompted many companies to look for new ways to grow, which has gone directly to Goldman’s bottom line. In the US alone, 94 IPOs have raised $28 billion, the most IPOs for the third quarter since 2000, according to Renaissance Capital.
Goldman’s results echoed strong results posted by its rival Morgan Stanley, which reported a big jump in profits due to its advisory business. Citigroup and JPMorgan Chase also reported profit gains due to their investment banking businesses.
Goldman also had a strong quarter in the business, though gains in the advisory business weren’t as impressive. The firm’s trading desk brought in $5.61 billion in the quarter, up 23% from a year ago. While trading in bonds, commodities and currencies was relatively stable, Goldman said its stock trading revenue increased 51% from a year ago.
Overall revenue for the company was $13.61 billion, much better than analysts’ expectations of $11.72 billion.
Shares of Goldman Sachs rose 1.9% in morning trading.