Goldman Sachs’ fourth-quarter profit beat Wall Street expectations on Thursday, fuelled by a surge in deal making and stronger trading revenues in a turbulent market.
The bank’s equity traders capitalised on volatility and a broader rally in the U.S. market as investors speculated on the Federal Reserve’s interest-rate path and the prospects for AI companies.
Goldman’s equity revenue rose to a record $4.31 billion (€3.7 billion), up from $3.45 billion a year ago, while trading revenue for fixed income, currencies, and commodities climbed 12.5 per cent to $3.11 billion.
The bank struck a deal with JPMorgan Chase to take over its Apple card partnership. Goldman expected a 46 cent per share increase in its results due to the exit.
Its profit per share came in at $14.01, beating analysts’ expectations of $11.67, according to data compiled by LSEG.
The investment bank increased its quarterly dividend to $4.50 per share in the first quarter, underscoring its expectations for a strong year.
“The dividend increase is a powerful testament to management’s faith in sustainably higher earnings from the franchise,” said Stephen Biggar, a banking analyst at Argus Research.
Morgan Stanley’s profit also beat analysts’ expectations in the fourth quarter, fuelled by a 47 per cent jump in investment banking revenue as deal making surged and debt underwriting fees nearly doubled.
A flurry of large transactions propelled global mergers and acquisitions past $5.1 trillion last year as exuberance over AI and rate cuts by the Federal Reserve encouraged CEOs to pursue buyouts.
Morgan Stanley’s investment banking revenue rose to $2.41 billion in the quarter from $1.64 billion, a year earlier.
Equity markets surged to record highs late last year despite volatility in the first half from U.S. President Donald Trump’s tariff policies.
“We are seeing an accelerating pipeline in M&A and IPOs ... We expect more deals in healthcare, industrials. Sponsors are also increasing activity because they have the dual track alternative now, either selling through an M&A transaction or an IPO,” Morgan Stanley CFO Sharon Yeshaya told Reuters.
The bank posted a profit of $2.68 per share in the quarter, compared with Wall Street expectations of $2.44, according to estimates compiled by LSEG.
Total annual revenue surged to a record high of $70.65 billion.
Shares of the bank rose marginally in premarket trading. They had gained about 41 per cent in 2025, outpacing the benchmark S&P 500 but lagging rival Goldman Sachs. – Reuters
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