Goldman Sachs ( GS ) third-quarter profit jumped 45% from a year ago as deal and stock trading boosted the Wall Street firm
Net income was nearly $3 billion, up from $2 billion in the third quarter of 2023. Investment banking fees were $1.8 billion, up 20% from a year earlier, as companies issued more debt and equity.
Even its advisory fees rose slightly due to a revival in mergers and acquisitions.
Goldman’s stock rose more than 3% in premarket trading on Tuesday, and it has risen a record 28% year to date, outperforming its other big-bank rivals.
The results provide the latest sign that a two-year deal drought appears to be ending as the Federal Reserve begins to cut interest rates, which is expected to spur more deals in the coming year.
Goldman’s rivals are showing a similar boost to their Wall Street operations. Investment banking fees at Wells Fargo ( WFC ) rose 37% in the third quarter from a year ago, while those at JPMorgan ( JPM ) rose 31%. Bank of America (PAC) on Tuesday reported an 18% increase in its investment banking fees.
Goldman’s other divisions also performed well. Goldman’s trading revenue rose 2% year over year, driven primarily by equity traders, while asset and wealth management revenue rose 16%.
But Goldman posted a pre-tax charge of $415 million in its consumer business, related to a credit card partnership with General Motors ( GM ) that Goldman is scaling back. Barclays said on Monday it would buy the business.
Goldman is trying to ditch its credit card partnership with Apple ( APPL ) .
The $415 million win comes as Goldman is still in the midst of a broader layoff from consumer lending as it tries to refocus on its core competencies of underwriting, trading and asset management.
But it’s in a much stronger position than a year ago, when CEO David Solomon was struggling with a slump in dealmaking, a costly exit from consumer lending and a series of high-profile departures from the company.
“Our performance demonstrates the strength of our world-class franchise in an improved operating environment,” CEO David Solomon said in a statement.
David Hollerith is a senior reporter at Yahoo Finance, covering banking, crypto and other areas of finance.
Click here for an in-depth analysis of the latest stock market news and events that move stock prices.
Read the latest financial and business news from Yahoo Finance
“Friend of animals everywhere. Devoted analyst. Total alcohol scholar. Infuriatingly humble food trailblazer.”