Goldman Sachs’ (GS) third-quarter profit rose 45% from a year ago as a surge in dealmaking boosted the Wall Street giant.
Net income was almost $3 billion, compared to about $2 billion in the third quarter of 2023. Investment banking expenses were $1.8 billion, up 20% from the same period last year, as companies increased debt and equity issuance .
Even consultancy costs rose slightly thanks to a revival in mergers and acquisitions.
Shares of Goldman rose more than 2% in pre-market trading on Tuesday, and are up 28% year to date.
The results offer the latest sign that a two-year drought of dealmaking appears to be coming to an end as the Federal Reserve begins cutting interest rates, a move expected to lead to more deals in the coming year.
Goldman’s rivals are showing a similar boost to their Wall Street operations. Investment banking fees at Wells Fargo (WFC) rose 37% in the third quarter compared to a year ago, while at JPMorgan (JPM) they rose 31%. Bank of America (BAC) reported on Tuesday that investment banking costs rose 18%.
Some other parts of Goldman also did well. Goldman’s trading revenue rose 2% year over year, driven by equity transactions, while wealth and asset management revenue rose 16%.
But Goldman did post a pretax profit of $415 million in its consumer business, partly related to a credit card partnership with General Motors (GM) that Goldman is divesting. Barclays said Monday it is acquiring that company.
The $415 million hit shows that Goldman is still in the midst of a broader cutback in consumer lending as the firm tries to refocus on its core competencies of dealmaking, trading and asset management.
But it is in a much stronger position than a year ago, when CEO David Solomon was grappling with a slump in dealmaking, a costly exit from consumer lending and a series of high-profile departures from the company.
“Our performance demonstrates the strength of our world-class franchise in an improving operating environment,” CEO David Solomon said in a statement.
David Hollerith is a senior reporter for Yahoo Finance, covering banking, cryptocurrency and other areas of finance.
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