Goldman Sachs Group Inc. earnings exceeded forecasts since its equity traders have demonstrated results that have turned out to be the best in the entire history of observations.
The profits of the mentioned financial institution for the fourth quarter of 2024 amounted to $4.1 billion. This indicator has more than doubled year-on-year. The corresponding result was driven by factors such as the strengthening of the investment bank, the expansion of the money-management business, and an unexpected $472 million gain from balance sheet bets.
Last year was a great year for Goldman Sachs. The lender has demonstrated one of the highest rates among the biggest banks in the United States. Last year, the value of the financial institution’s shares increased by 48%. Currently, investors are closely following the dynamic of the bank’s earnings. In this context, the main question is whether a financial institution can sustain the upward momentum.
Currently, Goldman Sachs is preparing for a long-awaited resurgence in deals after ditching major parts of a consumer foray.
Chief executive officer of the financial institution David Solomon stated that he is encouraged that the bank has managed to achieve or exceed almost all the goals that were formulated in the strategy to grow a lender five years ago.
Goldman Sachs considers the growing activity of buyout companies, the improving CEO confidence, and the likely rollback of onerous regulatory proposals as factors that can contribute to the enhancement of its results.
The financial institution’s revenue for the fourth quarter of 2024 was recorded at the $13.87 billion mark. This indicator exceeded analysts’ preliminary expectations and grew by 23% year-on-year. Currently, the shares of a financial institution are trading at almost 1.7 times their book value. It is worth noting that in this case there is a significant improvement. More than a year ago, the mentioned indicator dropped below 1.
On Wednesday, January 15, at the trading in New York, the value of shares of the financial institution showed an increase of 5.54%. Return on equity, a measure that tracks how profitably the bank invests shareholder equity, grew to 14.6%, which is significantly ahead of estimates and corresponds to the long-term targets of Goldman Sachs.
The fixed-income trading business of the financial institution generated revenue of $2.74 billion in the fourth quarter of 2024. The corresponding result was driven by factors such as gains in currencies, mortgages, and credit products. The stock-trading unit generated revenue of $3.45 billion in the fourth quarter of 2024. The full-year haul from that group has grown to $13.4 billion. It is worth noting that in this case, a record net revenue was fixed.
Investment banking’s revenue for the fourth quarter of 2024 was $2.05 billion. This indicator exceeded the preliminary forecasts of analysts. Merger advisory fees for the mentioned period were fixed at the $960 million mark.
The equity-capital business generated revenue of $499 million in the fourth quarter of 2024. A similar indicator for the asset- and wealth-management business was recorded at the $4.72 billion mark in the mentioned quarter. Debt-underwriting revenue for the corresponding period reached $595 million.
For the full year, management fees from the AWM unit exceeded the $10 billion mark. The assets that it oversees have grown to $3.1 trillion.
Goldman Sach’s platform solutions unit, which houses its transaction banking, financial technology businesses, and Apple Card partnership, generated revenue of $669 million in the fourth quarter of 2024. It’s worth noting that a financial institution has been trying to jettison the Apple tie-up after abandoning its consumer push, and a slew of credit card issuers have explored taking it on. David Solomon stated that the contract to run a partnership with the mentioned technology giant lasts until 2030. At the same time, he noted the possibility that the contract may not last until the specified time frame.
Moreover, a financial institution has set aside $16.7 billion for compensation and benefits. This indicator grew by 8% year-on-year.
As we have reported earlier, JPMorgan Chase Breaks Its Own Earnings Record.
