Goldman Sachs, once known as the Vampire Squid of Wall Street, may have gotten a friendlier makeover under CEO David Solomon. But the investment banking giant is still spreading its tentacles into many corners of the market — and making huge sums of money in the process.
Goldman said Tuesday that it reported a net profit of nearly $5.5 billion, or $15.02 a share, in the second quarter. That was up sharply from earnings of $373 million in the same quarter a year ago and easily topped analysts’ forecasts.
Shares of Goldman Sachs were up slightly in early trading Tuesday. The stock has now soared 44% this year, making it the best performing stock in the Dow for 2021.
The Wall Street giant’s strong results were led by solid gains in revenue for its investment banking business, which posted its second best quarter ever, and its asset management unit, which had a record quarter. Overall revenue rose 16% from a year ago to $15.4 billion.
Goldman Sachs has benefited from the stunning comeback in the stock market. Business is booming for the bank’s merger advisory services and Goldman Sachs is also generating big gains in revenue from initial public offerings and debt offerings as companies look to raise cash.
Solomon expressed cautious optimism about the comeback in the company’s earnings release though, saying that “while the economic recovery is underway, our clients and communities still face challenges in overcoming the pandemic.”
The solid numbers from Goldman Sachs come on the same day that rival JPMorgan Chase also posted healthy earnings for the second quarter. The next big obstacle for Goldman Sachs and other Wall Street firms will be navigating the return to work for many of its New York employees.
Goldman Sachs asked many of its workers to head back to the office last month, while other banks, such as rival Morgan Stanley, are holding off until September.
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