Goldman Sachs Group Inc. trounced its own Wall Street stock-trading records, posting $7.42 billion for a quarter that saw indexes rip higher and ongoing market volatility around artificial intelligence and war in the Middle East.
The firm’s second-quarter results mark the third consecutive quarter in which the firm’s equities unit has set an all-time record for any bank. Its haul in just the past three months is larger than what it made in all four quarters of 2019 combined.
The equities result jumped 72% from a year earlier, driven both by financing and taking profit in arranging bets, the bank said in a statement Tuesday. Rates traders also beat expectations after a disappointing first quarter, and its investment bankers posted their highest fees since 2021 from advising on mergers and underwriting.
Goldman reported $4.59 billion in revenue in rates trading. Investment-banking fees totaled $3.4 billion, beating the consensus of analyst estimates compiled by Bloomberg.
The bank’s shares climbed 5.2% at 9:40 a.m. in New York. They’ve gained 25% this year, more than the 16% increase in the KBW Bank Index.
Goldman’s fresh equities-trading record, which confirms a Bloomberg News report from June, came as investors made bets on the growth of Asian technology companies driving artificial intelligence and the S&P 500 index posted its best return in six years.
The record represents a blowout quarter for Goldman, though JPMorgan Chase & Co.’s equities traders posted a bigger jump. Their traders posted an 86% gain to $6.03 billion earlier Tuesday.
Goldman Chief Executive Officer David Solomon said in June that “there’s more greed than there is fear” in markets, with investors piling into new equities raises.
The firm’s investment bankers, who led the record-setting initial public offering of SpaceX and Alphabet Inc.’s equity raise in the second quarter, are ahead of peers in league tables by a wide margin. Revenue in the bank’s equities underwriting business jumped 130% compared to the same period last year.
Goldman holds more than a third of the M&A market share, according to data compiled by Bloomberg, advising on $1 trillion of deals this year in the fastest time on record for any bank.
“Our backlog increased to its highest level in five years and its second highest level on record,” Solomon said about the bank’s deals pipeline on a conference call with analysts.
Goldman’s asset-management unit is also growing quickly. It reported assets under supervision of $4.04 trillion in the second quarter, up more than $700 billion from a year earlier. Revenue in the unit increased 20% compared with a year earlier.
The results include record net revenue for the bank of $20.3 billion. Expenses also rose, but pay for staff rose at a slower pace than revenue. Revenue climbed 39% from a year earlier, while compensation was up 30%.
At the same time, the bank’s management is automating processes and cutting back-office inefficiencies to keep a lid on costs. John Waldron, the bank’s president and likely successor to Solomon, has said he’s focused on scaling the company without needing to hire many more people.
“I often describe Goldman Sachs as a human assembly line,” he said in May. “Our human assembly lines will become more digitized, digital agents will be our robots.”
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