Goldman Sachs (GS.N) beat Wall Street expectations for third-quarter profit on Tuesday, as its investment bankers earned higher advisory fees and rallying markets boosted revenue from managing client assets.
The bank's prediction for a banner year for dealmaking has materialized as corporations revive plans for mergers and listings.
Goldman's investment banking fees surged 42% to $2.66 billion in the quarter ended September 30 from a year ago. Analysts were expecting a 14.3% increase, according to the average estimate compiled by LSEG.
A Goldman executive said the firm advised on $1 trillion in announced mergers and acquisitions year to date, $220 billion more than its next closest competitor.
It advised Electronic Arts (EA.O), opens new tab on its $55 billion sale to a consortium of private equity firms and Saudi Arabia's Public Investment Fund this year, and also advised Holcim (HOLN.S) , opens new tab on the spinoff of its North American business Amrize, now valued at $26 billion.
Goldman also advised Fifth Third Bancorp (FITB.O), opens new tab, which this month agreed to buy regional lender Comerica (CMA.N) , opens new tab in a $10.9 billion deal to create the ninth-largest U.S. bank.
The growth was fueled by a 60% surge in advisory fees, while debt and equity underwriting fees also increased. Rival JPMorgan Chase (JPM.N), opens new tab also reported robust investment banking numbers.
Goldman shares fell 4.7% in early trading as analysts said the trading business underperformed market expectations even though financing for that segment was strong. The shares have surged 37% year-to-date as of Monday, reflecting the dealmaking rebound.
