Goldman Sachs has reported its most substantial profit since 3Q21, surpassing Wall Street forecasts due to robust performance in dealmaking, debt sales, and trading. The bank’s shares climbed by 2.6% pre-market on Wednesday after posting earnings of $11.95 per share for the fourth quarter, outstripping analysts’ projections of $8.22, based on data from LSEG. The stock settled 6% higher at $605.92 per share.
Goldman Sachs experienced a 24% increase in investment-banking fees, reaching $2.05 billion for the fourth quarter, largely driven by debt underwriting linked to leveraged finance and robust corporate bond sales.
With expectations of heightened dealmaking activity this year, fueled by potential Federal Reserve rate cuts and President-elect Donald Trump’s pro-business stance, industry experts are optimistic about the sector’s future.
There has been a significant recovery in mergers and acquisitions, along with renewed vigor in equity and debt markets, resulting in improved outcomes for top Wall Street banks in the latter half of 2024. Goldman’s investment banking saw equity and debt underwriting revenues soar by 98% and 51% respectively, bolstered by secondary and initial public offerings, private placements, and leveraged finance activities.
Despite a 4% dip in advisory revenue for the quarter, Goldman reported an annual rise for 2024 due to a surge in completed deals. Globally, investment-banking revenue jumped 26% to $86.8 billion, with North America witnessing a remarkable 33% year-over-year increase.
Goldman’s credit loss provisions fell to $351 million in Q4 from $577 million the previous year, primarily reflecting anticipated losses in its credit-card portfolio. The platform solutions unit, which includes certain consumer operations, saw a 16% increase in revenue to $669 million.
Goldman Sachs concluded 2024 with an impressive 48.4% surge in its stock price, marking the most significant rise among the six largest U.S. banks, substantially outperforming the broader market.
