Profit Rises 22% as Trading Revenue Drives Performance
Goldman Sachs delivered a stronger-than-expected second-quarter performance, fueled by outsized gains in its trading operations. The bank reported earnings of $10.91 per share, exceeding analyst expectations of $9.53, while revenue reached $14.58 billion, about $1.1 billion above forecasts compiled by LSEG.
Second-quarter net income climbed 22% year over year to $3.72 billion, supported by a 15% increase in revenue. Much of the beat was driven by equities trading, which brought in $4.3 billion — a 36% surge from the prior year and $650 million ahead of expectations. Fixed income revenue rose 9% to $3.47 billion, boosted by robust activity in currency and credit markets.
Market Volatility Drives Trading Revenues
President Donald Trump’s evolving tariff policies created volatility across financial markets, giving Wall Street trading desks a tailwind. As one of the most market-dependent banks, Goldman Sachs capitalized on these conditions, outperforming peers through its equities and fixed income platforms. The bank excelled as a broker for institutional investors and lenders in equity markets, and benefited from increased financing fees.
Goldman’s performance mirrored a broader trend among major U.S. banks. JPMorgan Chase, Citigroup, and Wells Fargo also posted stronger-than-expected results earlier this week, driven by improved trading volumes and asset recoveries. Morgan Stanley followed with similar gains, while Bank of America was the only large bank to miss revenue expectations.
Investment Banking Rebounds, Asset Management Slips
Goldman’s investment banking division saw a 26% jump in revenue to $2.19 billion, outperforming StreetAccount’s forecast by $290 million. The increase was attributed to higher advisory fees and a wave of deal completions following April’s market lows. This recovery is seen as a positive sign for merger and acquisition activity in the second half of the year.
However, not all segments matched expectations. The asset and wealth management division underperformed, with revenue down 3% year over year to $3.78 billion, falling $100 million short of estimates. The decline stemmed from reduced private equity and debt investment gains. The firm’s platform solutions division, which includes its consumer and technology-facing services, posted a modest 2% revenue increase to $685 million.
Outlook Remains Strong Amid Market Momentum
Shares of Goldman Sachs are up 23% so far this year, reflecting investor confidence in the bank’s trading-driven growth model. With markets continuing to react to trade policy shifts, Goldman’s ability to navigate volatility may keep it ahead of peers in the near term. Analysts are watching closely to see if the firm can maintain its momentum in the second half, particularly as deal-making activity shows signs of revival.
