Goldman Sachs ( GS ) reported its second-quarter profit jumped 150% from a year ago, as the investment bank surged, the latest signal that Wall Street is warming up after a two-year drought.
Net income was $3.04 billion, beating analyst expectations. Its total revenue of $12.73 billion was up 17% from a year ago.
The result gives CEO David Solomon more momentum following a very challenging year as his boss.
A year ago, he was battling a deal-making slump, a costly exit from consumer banking and a massive exodus from the company.
Goldman’s stock rose more than 2% on Monday and is up 28% year to date.
“We are in the early innings of a capital markets and M&A recovery, and while some transaction volumes are well below their tenure averages, we are very well off the pace of continued recovery,” Goldman’s Solomon said during a conference call. with researchers.
Goldman is the latest big bank to demonstrate that investment banking is benefiting from the resurgence.
On Friday, JPMorgan Chase ( JPM ), Wells Fargo ( WFC ), and Citigroup ( C ) reported significant improvements in earnings streams compared to last year’s second quarter.
The revival has given those banks a boost at a time when challenges to their high street consumer operations are mounting.
Goldman relies even more on Wall Street for its performance.
Its investment banking fees rose 21% from a year ago to $1.7 billion, driven by big growth in debt and equity underwriting. Advisory fees also rose by 7%.
Its investment banking performance declined compared to the first quarter. Fees are down by 17%.
Goldman’s better-than-expected trading results and increased focus on asset and wealth management.
Goldman’s fixed income trading revenue rose 17% year over year, while asset and wealth management revenue increased 27%.
The company also moved to challenge the results of the Federal Reserve’s latest annual stress test, which called for Goldman to increase its stressed capital buffer.
In light of the expected increase, CFO Dennis Coleman said the company plans to moderate its pace of share buybacks compared to the most recent quarter.
But Solomon said the firm doesn’t think the results reflect Goldman’s current risk profile.
“Given this discrepancy, we are engaging with our regulators to better understand its implications,” he added.
Correction: An earlier version of this article misspelled the first name of Goldman Sachs CFO Denise Coleman. Sorry for the mistake.
David Hollerith is a senior reporter at Yahoo Finance, covering banking, crypto and other areas of finance.
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