The Japan Times - Goldman Sachs profits rise on strong equity trading results

The investment giant reported $4.6 billion in profits to common shareholders, 16.6 percent above the year-ago level in results that topped analyst expectations.

Revenues were $15.1 billion, up six percent.

Chief Executive David Solomon said the Wall Street heavyweight was sticking close to its powerful client base as the Trump administration's constantly changing trade policy reverberates through markets and weakens the near-term US growth outlook.

"I know there is a higher level of uncertainty, but at the same point, clients are active," Solomon said on a conference call with analysts. "People are shifting positions, and we still see significant activity levels."

The forecasts from Goldman Sachs economists for US growth have "fallen meaningfully," said Solomon, who said the chance of a recession "has increased."

"How policies will evolve is still unknown," Solomon said. "We're hopeful that feedback from companies, large and small, institutional investors and ultimately, consumers, support an approach that will lead to greater economic certainty and long term growth."

Revenues tied to equity trading soared 27 percent from the year-ago level, with Goldman benefiting from strong demand for its services to facilitate trading and providing financing to clients trading stocks.

The bank said its advisory revenues were significantly lower than in the year-ago period. However, Goldman's investment banking fees backlog increased compared with the end of 2024.

Investment bankers had been eyeing more deals with the shift to the Trump administration from the Biden years, where mergers had been viewed skeptically.

But deal flow has so far lagged behind expectations, with analysts citing a weakening macroeconomic backdrop.

Solomon still expressed optimism about dealmaking in 2025 even if there has been something of a pause.

"In a period of uncertainty, things will slow down. But again, it's a big, complex world. There's a lot of change going on. Dialogues are up," he said.

"I would expect a significant amount of (merger and acquisition) activity through the rest of the year," Solomon added.

Goldman's Asset and Wealth Management business posted a drop in revenues, due to significantly lower revenues in equity and debt investment, partially offset by higher management fees.

Shares rose 1.8 percent in early-afternoon trading.

T.Ueda--JT