Goldman Sachs posted Friday third-quarter results that exceeded analysts’ expectations, as investment banking revenue surged nearly 90%, and the bank reaped record fees from equities financing. Profits at the bank surged 63% to $5.28 billion, or $14.93 a share, as revenue climbed 26% to $13.61billion. Shares of the New York-based bank rose 2.4%. The company, led by CEO David Solomon, has the world’s premier investment banking franchise. Many analysts had expected substantial revenue from booming merges and IPO activity in the quarter. That theme played out at Wall Street rivals from JPMorgan chase to Morgan Stanley. But Goldman exceeded expectations, producing $3.7 billion in investment banking revenue. That’s an 88% increase from a year earlier and roughly $750 million more than the streetAccount estimate.
Those results were driven by a rise in completed merger transactions and debt and equity underwriting; the bank said advisory revenue hit a record high. Revenue in the Banks’ markets division climbed 23% to $5.61 billion. Bond trading revenue of $2 billion edged out the $1.97 billion StreetAccount estimate, while equities trading of $1.92 billion missed the $2.08 billion estimate. Equities financing revenues more than doubled year over year to a record $1.18 billion, and fixed income financing rose 55% to $513 million. The firm’s consumer and wealth management division saw revenue increase 35% to $2.02 billion, exceeding the $1.79billion estimate. Goldman shares were up 47% this year as of Friday, exceeding the 37% rise of the KBW Bank Index. Goldman is the last of the six biggest U.S. banks to report earnings.