Goldman Sachs profit climbs as equity traders ride market rebound

GOLDMAN Sachs’ profit rose 51 per cent in the fourth quarter as its equity traders capitalised on a recovery in markets, it said on Tuesday (Jan 16).

The bank reported a profit of US$2.01 billion, or US$5.48 per share, for the latest quarter, compared with US$1.33 billion, or US$3.32 per share, a year earlier.

“This was a year of execution for Goldman Sachs,” CEO David Solomon said in a statement. “With everything we achieved in 2023 coupled with our clear and simplified strategy, we have a much stronger platform for 2024.”

Stock markets have rallied as economists and investors grow more confident the US will avoid a recession. Market participants are also debating when the Federal Reserve will cut interest rates, which could act as another catalyst for activity.

Goldman’s equity trading revenue jumped 26 per cent in the fourth quarter. Revenue from the asset and wealth management business also jumped 23 per cent to US$4.39 billion, helped by gains from equity and debt investments.

Investment banking fees fell 12 per cent compared with last year, to US$1.65 billion, as a decline in mergers and acquisitions (M&A) offset the gains from debt and stock sales.

Revenue from fixed income, currencies and commodities trading fell 24 per cent due to weakness in interest rate products and currencies, that dragged down gains from mortgage products.

Goldman had a headcount of 45,300 at the end of December, 1 per cent less than in the third quarter and nearly 7 per cent lower than in the year-earlier period.

The bank laid off thousands of employees in 2023, including cuts to its workforce in January that were the largest since the 2008 financial crisis.

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Goldman’s platform solutions unit, which houses some of its consumer operations, reported a 12 per cent jump in revenue to US$577 million.

Goldman is among the banking giants that will pay a special assessment fee to refill a government deposit insurance fund that was drained of US$16 billion by the collapse of two regional banks last year.

It recognised a US$529 million expense tied to the fee in the fourth quarter. REUTERS