Golden quar­ter for Gold­man as volatil­ity lifts rev­enues 93pc

The Daily Telegraph - Business - - Business - By Lucy Bur­ton

GOLD­MAN Sachs has emerged as the lat­est Wall Street bank to cash in on the coro­n­avirus trading frenzy in the sec­ond quar­ter af­ter rev­enues from trading shot up 93pc over the pe­riod.

The Wall Street bank­ing gi­ant saw its over­all rev­enues rise 41pc com­pared to a year ago to $13.3bn (£10.6bn) a near­record as mar­ket volatil­ity caused by coro­n­avirus trig­gered a trading boom and beat mar­ket es­ti­mates.

The trading surge off­set the lack of lu­cra­tive M&A deals, with the bank mak­ing a profit of $2.42bn in the quar­ter to July. Al­though the mar­ket ex­pected trading to be strong, the sharp rise in rev­enues still caused sur­prise.

“Gold­man’s earn­ings this quar­ter were too good – al­most in­de­cent,” said Oc­tavio Marenzi, boss of con­sul­tancy Opi­mas. “This is likely to have po­lit­i­cal ram­i­fi­ca­tions. The Fed has been able to engi­neer a huge bounce back in the mar­kets by in­ject­ing tril­lions of dol­lars, ben­e­fit­ing in­vest­ment banks pri­mar­ily. This will lead to calls for the gov­ern­ment to do more to help Main Street rather than Wall Street.”

The bank­ing gi­ant broke a num­ber of its records over the quar­ter. In­vest­ment bank­ing gen­er­ated record quar­terly rev­enues of $2.66bn, in­clud­ing record rev­enues in both eq­uity and debt un­der­writ­ing, while fixed in­come, cur­rency and com­modi­ties (FICC) trading rev­enues of $4.24bn marked its best per­for­mance in nine years.

Chief ex­ec­u­tive David Solomon ar­gued that tur­bu­lence from re­cent months “only re­in­forces” the com­mit­ment to his strat­egy.

The bank also put aside just un­der $1bn for le­gal costs over the quar­ter, likely to be saved for any charges re­lated to the 1MDB cor­rup­tion scan­dal.

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