A surge in trading revenue helped drive the investment bank's quarterly profit up 47 percent. But one analyst notes it's trailing its peers in trading, as Fred Katayama reports.
Goldman Sachs bouncing back from a weak first half. A surge in trading revenue helped push the investment bank's quarterly profit up 47 percent, crushing forecasts. Fueling that revenue: a big boost from fixed income, currencies and commodities trading stemming from strong sales of interest rate and credit products. Its investing and lending revenue doubled, thanks to the rally in global equities. Another bright spot: the profitability gauge, return on equity, surged north of 11 percent. Unlike other big banks like JPMorgan Chase and Citigroup, Goldman's revenue from investment banking was flat. The decline in mergers and acquisitions activity offset the rise in underwriting revenue. UBS analyst Brennan Hawken said, "Relative to peers that have already reported, results at Goldman Sachs year-to-date seem to be trailing most notably in fixed income, currencies and commodities but also in investment banking division." Goldman Sachs' shares, which have underperformed those of other big banks this year, rose at the start of trading.