Goldman Sachs Group reported its best quarterly profit in five years today.
The bank managed to notch up big gains from trading bonds and currencies as global markets gyrated during the first three months of the year.
Trading got a boost after the Swiss central bank scrapped a cap on the franc, the European Central Bank announced its quantitative easing programme, and the US Federal Reserve moved to tighten monetary policy.
That resulted in choppy trading that investment banks such as Goldman feed off.
The bank's total trading revenue rose 23% to $5.46 billion in the quarter ended March 31.
Goldman has been more committed to trading fixed-income, currencies and commodities (FICC) than some rivals, which are abandoning the business in the face of new capital rules and a slump in client activity.
FICC revenue rose 10% to $3.13 billion in the first quarter, after falling 29% in the fourth quarter. Total net revenue rose 14% to $10.62 billion.
Goldman said higher net revenue from trading currencies and interest rate products was partially offset by lower net revenue from credit products, commodities and mortgages.
"Given more normalised markets and higher levels of client activity, we remain encouraged about the prospects for continued growth," the bank's CEO Lloyd Blankfein said.
The bank posted a bigger gain from trading than JPMorgan Chase & Co in the quarter. Bank of America and Citigroup reported declines. Morgan Stanley reports its quarterly earnings next week.
Goldman Sachs said its investment banking revenue rose 7.1% to $1.91 billion, the highest since 2007. Net income rose 41% to $2.75 billion, or $5.94 per share, beating the average estimate of $4.26, according to Thomson Reuters.
The bank's return on equity was 14.7% in the quarter, compared with 10.9% a year earlier.
Compensation and benefit expenses rose 11.2% but were down slightly as a percentage of net revenue. Total operating expenses rose 6% to $6.68 billion.
