Goldman Sachs reported third-quarter earnings Friday that beat Wall Street's expectations.- Investment banking generated its second-highest quarterly net revenues.
- The firm said its backlog was lower compared to previous quarter but remained higher compared with end of 2020.
Goldman Sachs reported third-quarter earnings on Friday that easily beat expectations across the board, headlined by its strong investment banking revenue.
Investment banking generated its second-highest quarterly net revenues ever, just behind the first quarter of 2021, thanks to record highs in financial advisory, underwriting, and corporate lending. The firm said its backlog was lower compared to the previous quarter but remained significantly higher compared with the end of 2020.
Investment banking revenue climbed to $3.55 billion for the quarter ended September 30, higher than the $2.85 billion estimated by analysts surveyed by Bloomberg.
Goldman Sach stock rose 2% to 399.00 early Friday morning. Excluding Friday, shares have risen eight times out of the prior 12 earnings announcements.
Here are the key numbers:
- Net Revenue: $13.61 billion, versus $11.60 billion expected by Bloomberg consensus.
- Adjusted earnings per share: $14.93, versus $9.92 expected by Bloomberg consensus.
- Net Interest income: $1.56 billion, versus $1.43 billion expected by Bloomberg consensus.
While the bank's quarterly net revenues were 26% higher than a year ago, they were 12% lower than the second quarter. But Goldman's trading businesses took in $5.61 billion in the quarter, up from $4.14 billion in the prior quarter.
The firm said it remained ranked at the top in announced and completed mergers and acquisitions worldwide, as well as in equity and equity-related offerings, common stock offerings, and initial public offerings for the year-to-date.
"The third quarter saw strong operating performance and an acceleration of our investment in the growth of Goldman Sachs," CEO David Solomon said in a statement. "We announced two strategic acquisitions in our Asset Management and Consumer businesses which will enhance our scale and ability to drive higher, more durable returns."
In August, Goldman Sachs acquired NN Investment Partners, an asset manager based in The Hague, Netherlands, for approximately $1.85 billion. The following month, in September, the investment bank acquired GreenSky, a home-improvement and healthcare loan platform, intending to pair it with Goldman's Marcus direct bank division.
Both deals, Goldman Sachs said, are expected to close by the first quarter of next year.
Goldman maintained its quarterly dividend of $2 per share to be paid at the end of the year.
The earnings report caps a week of strong results from top banks. JPMorgan, the largest US bank, kicked off the earnings season on Wednesday, posting third-quarter results that beat profit estimates as its advisory fees nearly tripled.
Bank of America on Thursday reported third-quarter earnings that blew past analyst expectations, led by record advisory fees and a strong performance from its investment banking business. Citigroup reported a 48% climb in net income for its third quarter, with the financial services firm posting gains in capital