Big-money takeovers earn Goldman Sachs £3.8billion
WALL Street banking giant Goldman Sachs raked in a £3.8billion profit in the space of just three months on the back of a wave of big-money takeovers.
The US heavyweight makes a big chunk of its money from lucrative fees for advising on the world’s biggest deals.
Goldman’s investment banking arm netted £1.2billion revenues from financial advisory services in the three months to the end of September, a 31 per cent rise on the previous quarter and 225 per cent more than the same period a year ago.
Group revenues hit almost £10billion in the quarter.
Among the flurry of deals Goldman has been involved in is US private equity giant Clayton Dubilier & Rice’s £7billion takeover of British supermarket chain Morrisons.
The pace of deal-making has surpassed all expectations, with advisers struggling to cope with transaction volumes never seen before.
Goldman has been among those to benefit from an estimated £1trillion worth of deals signed by the world’s biggest investment banks in the three months to September, according to data from Refinitiv.
Goldman’s quarterly earnings bonanza was up sharply from the £2.35billion the same time last year. Its investment banking arm had its second best quarter ever, driven by strength in advisory and underwriting fees.
The global markets business, which now houses the trading business and accounts for roughly 41 per cent of overall revenue, reported revenue up 23 per cent.
Goldman also cashed in as companies rushed to raise capital, refinanced debt and sold new stock.
Yesterday’s results also revealed how it set aside £2.3billion on “compensation and benefits” for staff, including bonuses. The bank’s global workforce increased to 43,000, up by 2,200 from the end of June.
David Solomon, Goldman’s chairman and chief executive, said: “Looking forward, the opportunity set continues to be attractive across all of our businesses and our focus remains on serving our clients and executing our strategy.”