NEW YOK: The Goldman Sachs building is seen in lower Manhattan in New York City. - AFP

NEW YORK: Goldman Sachs Group Inc yesterday posted its best quarterly performance in a decade by some measures, as its trading business moved back into the limelight and its lack of a big consumer business switched from a curse to a blessing. The Wall Street trading powerhouse easily outperformed rivals JPMorgan Chase & Co and Citigroup Inc with a 29 percent jump in overall trading revenue, as clients bought and sold more stocks and bonds to adjust their portfolios in response to the coronavirus pandemic. The bank's shares rose nearly 3 percent in premarket trading as it reported a 49 percent surge in bond trading revenue to $2.5 billion. Equities trading revenue rose 10 percent to $2.05 billion.

Unlike rivals such as JPMorgan and Bank of America Corp, Goldman has a relatively small consumer business, even though it has been one of the top strategic priorities for Chief Executive David Solomon who wants Goldman to look more like a Main Street bank. However, the lack of a large consumer bank has proved to be a blessing for Goldman, protecting it from loan defaults during the pandemic and the impact of low interest rates.

In the third quarter, Goldman set aside $278 million to cover loans that go bad, compared with $1.59 billion in the second quarter. Goldman's return on equity (ROE) climbed to 17.5 percent, its best since 2010. Metrics like RoE help measure how well a bank uses shareholder money to produce profit.

The bank also generated handsome underwriting fees from a number of high-profile IPOs such as Snowflake, Rocket Companies and Dun & Bradstreet during the quarter. Net earnings applicable to common shareholders surged to $3.5 billion in the quarter ended Sept. 30 from $1.8 billion a year ago. Earnings per share doubled to a record $9.68 from $4.79 a year earlier.

Analysts had expected a profit of $5.57 per share, on average, according to the IBES estimate from Refinitiv. Total net revenue jumped 30 percent to $10.78 billion and beat estimates of $9.5 billion. Revenue at all four of its main reporting lines jumped, with asset management revenue up 71 percent to $2.8 billion. - Reuters