Goldman Sachs' profit rose 51% in the fourth quarter as its equity traders capitalised on a recovery in markets and revenue from its asset and wealth business rose, offsetting weakness in investment banking.
The bank reported a profit of $2.01 billion, or $5.48 per share, for the latest quarter, compared with $1.33 billion, or $3.32 per share, a year earlier.
"This was a year of execution for Goldman Sachs," CEO David Solomon said in a statement.
"With everything we achieved in 2023 coupled with our clear and simplified strategy, we have a much stronger platform for 2024," he added.
The bank's shares climbed 1.7% to $384.50 in trading before the bell. They rose 12.3% last year, compared with gains of 27% for JPMorgan Chase and 10% for Morgan Stanley.
Stock markets have rallied as economists and investors grow more confident the US will avoid a recession. Market participants are also debating when the Federal Reserve will cut interest rates, which could act as another catalyst for activity.
Goldman's equity trading revenue jumped 26% in the fourth quarter. Revenue from the asset and wealth management business also jumped 23% to $4.39 billion, helped by gains from equity and debt investments.
Investment banking fees fell 12% compared to last year, to $1.65 billion, as a decline in mergers and acquisitions (M&A) offset the gains from debt and stock sales.
Revenue from fixed income, currencies and commodities (FICC) trading fell 24% due to weakness in interest rate products and currencies, that dragged down gains from mortgage products.
Goldman had a headcount of 45,300 at the end of December, 1% less than in the third quarter and nearly 7% lower than the same time last year.
The bank laid off thousands of employees in 2023, including cuts to its workforce in January that were the largest since the 2008 financial crisis.
Goldman's platform solutions unit, which houses some of its consumer operations, reported a 12% jump in revenue to $577m.
Goldman is among the banking giants that will pay a special assessment fee to refill a government deposit insurance fund (DIF) that was drained of $16 billion by the collapse of two regional banks last year.
It recognised a $529m expense tied to the fee in the fourth quarter.
