US investment bank Goldman Sachs has reported better than expected quarterly results, helped by a big increase in profits from bond trading.
Meanwhile, another US banking giant Citigroup has beaten expectations, by reporting a net profit of $101m for the thrd quarter of this year. Read more here
Goldman Sachs reported net profits of $3.2 billion, or $5.25 a share. That compared with $845m in the same period a year earlier. Analysts on average had forecast earnings of $4.24 a share.
Net revenues amounted to $12.4 billion. 'Although the world continues to face serious economic challenges, we are seeing improving conditions and evidence of stabilisation, even growth, across a number of sectors,' said Lloyd Blankfein, chairman and chief executive.
Goldman set aside $5.4 billion for pay during the third quarter, raising its total to $16.8 billion for the year. In the first half of the year, it averaged $5.7 billion per quarter, or just under half its revenue.
Profits from trading soar
One of the leading Wall Street investment banks, Goldman Sachs changed its charter a year ago to become a commercial bank to secure easier access to Federal Reserve lending facilities in order to help it cope with the financial crisis.
After a series of takeovers and failures rocked Wall Street last year, Goldman and Morgan Stanley were left as the only major independent investment banks, but both opted to become regulated commercial banks.
Still, Goldman's main activities remain investment banking and trading, and it said it ranked first worldwide in global mergers and acquisitions in 2009.
The company received $10 billion in US government capital as part of an effort to stabilise the financial system but repaid the US Treasury in the second quarter with dividends.
Its revenue from investment banking was $899m, 31% lower than the third quarter of 2008 and 38% lower than the second quarter of this year. Trading and investments generated revenues of $10 billion, nearly four times the level of a year ago while equities generated revenue of $2.78 billion.
