Goldman Sachs reported strong fourth-quarter earnings that exceeded analysts’ expectations, fueled by robust performance in equities trading and asset and wealth management. The bank announced earnings of $14.01 per share, significantly surpassing the LSEG estimate of $11.67 per share. Total revenue for the quarter reached $13.45 billion, slightly below the $13.79 billion forecasted by LSEG.
The bank experienced a 12% increase in profit from the previous year, totaling $4.62 billion, reflecting gains across its capital markets divisions. Despite the positive earnings, the revenue dipped by 3% due to the sale of its Apple Card business to JPMorgan Chase and the early termination of its contract with Apple. Goldman Sachs emphasized its resilient Wall Street-centric model, attributing this success to high stock prices, decreasing interest rates, and increased institutional investor engagement amidst market volatility.
CEO David Solomon noted the strong client engagement and anticipated growth momentum for the firm, projecting increased activity in 2026. Goldman Sachs also highlighted its capability to surpass its organizational targets, propelled by the recovery in capital markets and deregulation within the industry.
Key contributors to their strong performance included a 25% increase in equities trading revenue, reaching $4.31 billion, and a 12% rise in fixed income trading revenue to $3.11 billion. The investment banking sector also saw a 25% rise in fees, driven by gains in mergers advisory and debt underwriting. In asset and wealth management, revenue remained stable at $4.72 billion, exceeding expectations despite some losses in public equities.
However, the firm’s smallest business, platform solutions, reported a significant revenue loss of $1.68 billion for the quarter, impacted by the Apple Card exit.
Why this story matters: This report highlights Goldman Sachs’ strong market presence amidst challenges, indicating robust growth potential for investment banks.
Key takeaway: Goldman Sachs exceeded profit expectations, driven by equities trading and asset management despite a revenue decline from strategic business changes.
Opposing viewpoint: The revenue dip raises questions about the sustainability of Goldman’s recent performance, particularly with the loss from the Apple Card business.
