(Reuters) – Goldman Sachs profit more than doubled in the fourth quarter, boosted by bankers who brought in more fees from dealmaking, debt sales and stronger trading, sending shares up 3% before the bell.
Profit rose to $4.11 billion, or $11.95 per diluted share, for the three months ended Dec. 31, compared with $2.01 billion, or $5.48 per diluted share, a year ago, the Wall Street giant announced on Wednesday.
That was the bank’s biggest quarterly profit since the third quarter of 2021, according to data compiled by LSEG.
Banking industry executives are predicting stronger deal-making activity this year as the U.S. central bank cuts interest rates and President-elect Donald Trump’s presidential remarks fuel optimism among investors.
“We are very pleased with our strong results for the quarter and the year,” CEO David Solomon said in a statement. “I am encouraged by the fact that we have met or exceeded almost all of the goals we set in our company development strategy five years ago.”
Goldman’s investment banking fees rose 24% to $2.05 billion in the fourth quarter, driven by debt underwriting that benefited from strong leveraged financing and corporate bond sales.
A rebound in mergers and acquisitions across the industry along with renewed activity in the equity and debt markets lifted results in the second half of 2024 for Wall Street’s leading banks.
In total ( EPA: ) investment banking revenue grew 26% globally to $86.8 billion in 2024, with North America growing 33% year over year, according to Dealogic. Goldman achieved the second highest revenue among banks in the world.
Last month, Solomon told a Reuters conference that dealmaking in stocks and M&A could exceed 10-year averages in 2025.
Goldman’s Global Banking and Markets division’s revenue rose 33% to $8.48 billion in the fourth quarter.
The bank’s stock traders continued to outperform the broader stock market in the final three months of 2024, with revenue jumping 32% to $3.45 billion.
US stocks hit record highs, boosted by optimism about the new administration’s economic policies, combined with lower interest rates.
Fixed Income, Currencies and Commodities (FICC) trading also shone with a 35% jump in revenue.
Goldman announced a series of leadership changes on Monday as it created a new division to focus on financing large deals and lending to corporate clients, looking to capitalize on the lucrative private credit market.
Meanwhile, the Wall Street giant is still scaling back its struggling consumer operations after losing billions of dollars. Solomon, who once championed retail, has drawn criticism for his strategy.
Goldman’s loan loss provisions were $351 million for the fourth quarter, down from $577 million a year ago, largely due to potential losses on its credit card portfolio.
Revenue from platform solutions, the unit that houses some of Goldman’s consumer operations, climbed 16% to $669 million.
Goldman shares ended 2024 up 48.4%, the biggest gain among the six largest US lenders, and slightly outperformed the market benchmark.
Rival JPMorgan Chase (NYSE: ) posted a record annual profit, while Wells Fargo (NYSE: ) profits also rose due to a rebound in deal-making activity.
