Goldman Sachs posts big jump in profits as market rebounds
Posted October 14, 2020 10:59 a.m. EDT
CNN — Investment banking giant Goldman Sachs reported impressive third-quarter results Wednesday morning. Profits nearly doubled to $3.6 billion and easily topped Wall Street's forecasts. Revenue rose 30% from a year ago and also surpassed analysts' estimates.
Shares of Goldman Sachs were flat on the news, however.
Goldman Sachs has benefited from the explosive rebound in the stock market since March.
Revenue for its trading unit rose solidly and Goldman Sachs also generated solid gains in sales from its asset management business as well as a healthy jump in stock underwriting fees thanks to the boom for initial public offerings.
CEO David Solomon acknowledged in a press release that the world remains in "a very uncertain environment" due to Covid-19 but added that "as our clients begin to emerge from the tough economy brought on by the pandemic, we are well positioned to help them recover and grow, particularly given market share gains we've achieved this year."
Goldman Sachs is also growing more hopeful that the economy will rebound next year even as many experts worry that a more tepid recovery is in store. The company said in a slide presentation that it expects the US economy to grow 5.8% in 2021 following a 3.4% contraction this year.
The company, like most others on Wall Street, has also faced disruptions to how it conducts business because of the pandemic.
During a conference call with analysts, Solomon said that about 60% of its workers in Hong Kong and Tokyo are back in the office and about half of its employees have returned to the office in Europe.
But it's taking longer to get back to normal in London and on Wall Street.
Solomon said only 30% of its UK workers are back in the office and that there are currently about 2,000 people working in New York's headquarters, with about 30% of the New York staff coming to the office on a rotating weekly basis.
Goldman Sachs is the latest big financial firm to report its third quarter numbers, following strong earnings from JPMorgan Chase and BlackRock and mixed results from Citigroup and Bank of America.