Goldman Sachs Group today posted its best quarterly performance in a decade by some measures.
This came as its trading business moved back into the limelight and its lack of a big consumer business switched from a curse to a blessing.
The Wall Street trading powerhouse easily outperformed rivals JPMorgan Chase & Co and Citigroup with a 29% jump in overall trading revenue, as clients bought and sold more stocks and bonds to adjust their portfolios in response to the coronavirus pandemic.
The bank reported a 49% surge in bond trading revenue to $2.5 billion. Equities trading revenue rose 10% to $2.05 billion.
Unlike rivals such as JPMorgan and Bank of America, Goldman has a relatively small consumer business, even though it has been one of the top strategic priorities for chief executive David Solomon.
He wants Goldman to look more like a Main Street bank.
However, the lack of a large consumer bank has proved to be a blessing for Goldman, protecting it from loan defaults during the pandemic and the impact of low interest rates.
In the third quarter, Goldman said it set aside $278m to cover loans that go bad, compared with $1.59 billion in the second quarter.
Goldman's return on equity (ROE) climbed to 17.5%, its best since 2010. Metrics like RoE help measure how well a bank uses shareholder money to produce profit.
The bank also generated handsome underwriting fees from a number of high-profile IPOs such as Snowflake, Rocket Companies and Dun & Bradstreet during the quarter.
Net earnings applicable to common shareholders surged to $3.5 billion in the quarter ended September 30 from $1.8 billion a year ago.
Earnings per share doubled to a record $9.68 from $4.79 a year earlier.
Analysts had expected a profit of $5.57 per share, on average, according to the IBES estimate from Refinitiv.
The bank said its total net revenue jumped 30% to $10.78 billion and beat estimates of $9.5 billion.
Revenue at all four of its main reporting lines jumped, with asset management revenue up 71% to $2.8 billion.