Goldman Sachs' dealmakers capped their record year with a fourth-quarter revenue jump that helped profit more than double.
Investment banking revenue climbed 27% from a year earlier as fees from equity underwriting nearly tripled. The firm's stock traders delivered a 40% revenue increase, making up for fixed-income trading that fell short of analyst estimates.
"Our people responded admirably to a series of professional and personal challenges, while working from home or in offices that were reshaped dramatically," Chief Executive David Solomon said in a statement Tuesday.
For Solomon, the last few months have presented the most hopeful sign yet of investors embracing his strategy pivot, with last quarter's 31% gain marking the stock's best period since the 59-year-old took the top job Goldman Sachs in October 2018.
Solomon has also been able to cast off the 1MDB scandal that had dogged his first two years atop Goldman. In October, the bank agreed to pay a record anti-bribery fine and about $5 billion in global penalties to avoid more serious repercussions.
Goldman's shares were up 2.5% to $308.75 at 7:36 am in early New York trading. The stock soared past $309 last week to an intraday record, and have gained 14% this month.
Net income more than doubled to $4.51 billion in the quarter, pushing the annual total higher than 2019's haul.
Fixed-income trading revenue climbed 6%, less than the 14% gain analysts had estimated. Equities trading rose to $2.39 billion.
A year that delivered great despair and economic pain will also go down as one of the most lucrative environments in Wall Street history. It offered up the perfect conditions for banks to print big profits powered by commodities, rates and credit. JPMorgan Chase also flourished, closing out the most profitable year ever for its trading and investment banking division.
Deposits in Goldman's consumer operation rose to $97 billion. The bank has been marching ahead with new consumer products and offerings, and in its latest move, it took over the General Motors credit card business. And persistent strength in core trading and dealmaking franchises provide a cushion to expand new lines of revenue including the nascent transaction-banking group.
The bank's lending portfolio also stayed on the mend, as its loan-loss provision fell from a year earlier to $293 million.
