Goldman Sachs reports 94% rise in quarterly profit as bond trading surges

Bond trading revenue surged 49% to $2.5 billion, while equities trading rose 10% to $2.05 billion.

Goldman Sachs Group Inc reported a 94 per cent rise in quarterly profit on Wednesday that swept past estimates, driven by strength in its bond trading business and lower provisions for credit losses.

With a 29 per cent jump in trading revenue, Goldman easily outperformed rivals JPMorgan Chase & Co and Citigroup Inc as financial market volumes broke records in a recovery from a coronavirus-led selloff.

Bond trading revenue surged 49 per cent to $2.5 billion, while equities trading rose 10 per cent to $2.05 billion.

The bank’s net earnings applicable to common shareholders surged to $3.5 billion in the quarter ended Sept. 30 from $1.8 billion a year ago. Earnings per share doubled to $9.68 from $4.79 a year earlier.

Analysts had expected a profit of $5.57 per share, on average, according to the IBES estimate from Refinitiv.

Total net revenue jumped 30 per cent to $10.78 billion and beat estimates of $9.5 billion.

Unlike rivals such as JPMorgan and Bank of America Corp, Goldman has a relatively small consumer business. Although Goldman is trying to build out its consumer bank, the lack of exposure has protected it from loan defaults during the pandemic.

This quarter, Goldman set aside $278 million to cover loans that go bad, compared with $1.59 billion in the same period last year.