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Goldman Sachs profits more than doubled in the second quarter to $3bn as the Wall Street bank reaped the benefits from an accelerating recovery in dealmaking and its bond and equities traders performed better than expected.
Net income for the quarter exceeded the $2.8bn analysts were expecting and was up from $1.2bn a year earlier.
A recovery in investment banking will help Goldman draw a line under a fraught 12 months in which chief executive David Solomon’s management of the bank came under fire.
In a statement, Solomon said he was “pleased with our solid second-quarter results and our overall performance in the first half of the year”.
A rebound in mergers and acquisitions and debt deals has helped drive Goldman’s shares up by roughly a quarter this year to a record, outperforming the 13 per cent rise in the KBW Bank index and the 18 per cent advance in the S&P 500 over the same period.
Goldman shares were volatile in pre-market trading on Monday.
Investment banking revenues rose 21 per cent to $1.7bn in the quarter, just short of forecasts and lagging behind the 50 per cent increase that rival JPMorgan Chase reported last week.
ExxonMobil’s $60bn acquisition of Pioneer Natural Resources was among the transactions Goldman advised on in the second quarter, one of the largest since a two-year drought in dealmaking ended.
Revenues from fixed income trading were up 17 per cent at $3.2bn while Goldman made $3.2bn in equities trading, up 7 per cent from a year earlier.
The performance of both businesses was better than analysts had forecast.
Goldman’s asset and wealth management division, which is at the heart of Solomon’s efforts to make the bank’s earnings more durable and less reliant on volatile investment banking and trading, reported a 27 per cent increase in revenues to $3.9bn.
Longtime Goldman rival, Morgan Stanley, reports results on Tuesday.
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