Goldman Posts Wall Street’s Biggest Bond-Trading Jump So Far

Goldman Sachs Group Inc. joined other big U.S. banks in cashing in on continuing pandemic-induced volatility, as the firm’s bond traders posted the biggest jump on Wall Street so far.

Third-quarter revenue from buying and selling stocks and bonds increased 29%, driven by a 49% surge in fixed-income trading and mirroring similar gains reported Tuesday by JPMorgan Chase & Co. and Citigroup Inc. Revenue at each of Goldman’s four divisions rose from a year earlier, pushing earnings per share to a record that was almost twice as high as analysts predicted.

Many investors were expecting Goldman to beat estimates, “but nowhere close to this order of magnitude, with strength coming from both high- and low-quality sources,” Steven Chubak, an analyst at Wolfe Research, wrote in a note. “Whatever your whisper number was, they crushed that too.”

Trading gains since the start of the pandemic have helped offset weakness in consumer businesses at the nation’s biggest banks, where loan-loss provisions piled up in the first half of the year. For Goldman, which is still a minnow in the world of retail banking, dealmaking and trading divisions have helped cushion its stock price from the kinds of steep declines some of its competitors have experienced.

Shares of the company are down 7.3% this year, compared with an 19% decline for the S&P 500 Financials Index. They climbed 1% to $212.90 at 9:38 a.m. in New York.

The firm also posted a surprise drop from a year earlier in its loan-loss provisions, echoing its bigger rivals in socking away a much smaller amount for credit losses. The stockpile amounted to just $278 million in the third quarter, down from $1.6 billion for the previous three months. The decline was mostly tied to corporate and consumer borrowers paying down loans, Goldman said.