Goldman’s profit jumps as market turbulence powers record equities trading
(Reuters) -Goldman Sachs’ profit jumped 22% in the second quarter, as turbulent markets lifted equities trading revenue to a record and a pickup in dealmaking boosted investment banking.
Investors flocked to markets to make trades and manage tariff-related risks as U.S. trade policies shifted. The turmoil boosted trading desks across Wall Street.
Goldman’s equities trading revenue rose 36% to $4.3 billion, while fixed income, currencies and commodities hauled in $3.47 billion, 9% higher than a year ago.
Its investment banking fees stood at $2.19 billion in the quarter, rising 26% from a year earlier. Fees from advisory were significantly higher, while debt underwriting dipped.
Overall profit was $3.7 billion, or $10.91 per share, for the three months ended June 30, compared with $3.04 billion, or $8.62 per share, a year earlier.
Rivals JPMorgan Chase (NYSE:JPM) and Citigroup (NYSE:C) also reported strong trading gains on Tuesday.
ASSET AND WEALTH REVENUE FALLS
Revenue from Goldman’s asset and wealth management arm, which caters to institutions and high net-worth individuals, dipped 3% to $3.78 billion due to weakness in equity and debt investments.
The business is important for Goldman as it can offer steadier revenue than trading and investment banking.
The bank set aside $384 million as provisions for credit losses, compared with $282 million last year. The provisions were mainly related to its credit card portfolio.
Goldman was one of 22 banks that cleared the Federal Reserve’s annual stress test last month, paving the way for it to increase its dividend by $1 a share from the third quarter.
Its shares have climbed 23% so far this year, making them the fifth best-performer in the S&P 500 financial index.
The bank awarded Solomon an $80 million stock bonus to retain him for another five years, drawing pushback from influential proxy advisers Institutional Shareholder Services and Glass Lewis.
At its annual meeting in April, shareholders approved pay packages for the bank’s executives, although with lower support compared to last year.
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