Goldman Sachs Group today beat Wall Street estimates on a smaller-than-expected revenue decline at its struggling bond trading unit, gains in its private equity investments and higher fees from dealmaking.
The bank said its bond trading revenue fell 26% on subdued market volatility, but was much better than analysts' expectations.
Goldman Sachs had reported a 40% slump in bond trading in the second quarter.
Revenue from trading bonds, currencies and commodities (FICC) fell to $1.45 billion.
Goldman's major Wall Street rivals reported quarterly bond trading declines of 16 to 27% ahead of its report.
The bank's core bond-trading unit has suffered three quarterly declines in a row on low volatility and the bank has been looking for ways to shore up its FICC division.
Goldman has been trying to shift away from the bond-trading unit to more stable businesses like investment management and consumer lending, where it launched Marcus, an online platform in 2016.
The bank said its net income was $2.04 billion, or $5.02 per share, for the third quarter ended September 30, compared with $2.10 billion, or $4.88 per share a year ago.
Analysts on average had expected earnings of $4.17 per share, according to Thomson Reuters.
Total revenue, including net interest income, rose 2% to $8.33 billion, helped by investment banking and lending business. Analysts had expected revenue of $7.54 billion.
Investing and lending revenue rose 34.7% to $1.88 billion, while revenue from investment banking rose 16.9% to $1.80 billion.
The lender's return on equity was 10.9%. Analysts typically like to see a bank produce returns of at least 10%to meet its cost of capital.
Goldman's arch rival Morgan Stanley reported a higher profit, driven by its investment banking and wealth management businesses.
However, fixed-income trading fell 20% to $1.2 billion.
