Under the catalysis of the bull market in the US stock market, Goldman Sachs' profits surged by 45%! Stock trading business achieved the best performance in 3 years

According to the financial news app Zhitong Finance, Wall Street financial giant Goldman Sachs Group (GS.US) announced its third-quarter financial report before the US stock market on Tuesday. The performance data shows that driven by the bull market in the US stock market, the group's third-quarter profit soared by 45%. This was mainly due to the unexpectedly significant increase in revenue from stock trading under the flagship of "bull market leader" Goldman Sachs, as well as the accelerated recovery of investment banking business. Goldman Sachs' net profit in Q3 surged to $2.99 billion, a significant increase of 45% year-on-year, with diluted earnings per share of $8.40, up 54% year-on-year. Goldman Sachs' total revenue in Q3 increased by 7% year-on-year to $12.7 billion, exceeding the market's general expectation of $11.8 billion. Stimulated by the strong financial report, Goldman Sachs' stock price rose by more than 3.5% before the US stock market on Tuesday.

The company's stock traders achieved their strongest quarterly performance in over three years, and Goldman Sachs' stock trading business is very likely to achieve its best annual performance ever. At the same time, elite level trading matchmakers at Goldman Sachs received commission fees exceeding expectations from each key business line. The profit of Goldman Sachs' investment banking division eased due to the previous decline in fixed income trading.

Investors have been significantly boosting Goldman Sachs' stock price this year, mainly because the financial giant has abandoned the major setback in its consumer banking business and is poised to benefit from the trend of the recovery of Wall Street investment banking business and the hot long-term bull market in US stocks. On Wall Street, financial giants like Goldman Sachs have expressed their ability to withstand the impact of consumer retail business due to interest rate cuts, while emphasizing the potential of IPO business and increased merger and acquisition transaction matching to raise the industry's fee benchmark.

Goldman Sachs' stock price has seen the largest increase among top US investment banks this year, rising by as much as 36%, reaching a historic high on Monday. Especially in the second half of the year, the stock price has soared, mainly due to the warming expectation of a "soft landing" in the US economy, driving the continuous bullish trend in US stocks and further pushing up the stock prices of Wall Street giants such as Goldman Sachs, Morgan Stanley, and Citigroup that hold a significant share in the US stock investment field.

The financial giant's performance includes a $415 million loss related to ending its credit card partnership with General Motors Co. and abandoning other small retail-related credit businesses. Barclays Bank had announced on Monday that it would take over General Motors' related credit card business after Goldman Sachs' failed attempt to enter the consumer loan market.

Last year, this Wall Street financial giant spent a lot of time trying to abandon its much larger credit card partnership with Apple Inc. If Goldman Sachs exits the partnership by selling the discounted loan asset portfolio, the business with an outstanding balance of about $17 billion may suffer even more severe setbacks.

Goldman Sachs CEO David Solomon had previously stated last month that the revenue scale related to equity and debt investments in its asset management department had significantly slowed down, especially as the group reduced the size of its balance sheet investments. This type of revenue scale was about $294 million, a significant slowdown compared to the past few quarters, including a high of $1.2 billion at the end of last year Despite the increasingly hot market of US stocks, Goldman Sachs has adjusted its business focus, but the bank has not yet reached its target return on equity (ROE) of around 15%. In the past 10 quarters, the group has only achieved this target once. In the three months ending in September, the financial giant headquartered in New York announced a ROE of about 10.4% - this indicator tracks the specific profitability of the bank's equity investments.

Detailed performance data shows that the overall revenue of the entire stock trading department of Goldman Sachs Group in the third quarter reached $3.5 billion, the best performance since the first quarter of 2021, an 18% year-on-year increase and a 10% increase from the previous quarter - which had already shown strong growth. Goldman Sachs attributed the significant increase in revenue from stock-related derivatives and cash products intermediation to this.

The revenue scale of Goldman Sachs' fixed income trading business in Q3 decreased by 12% year-on-year to $2.96 billion, mainly due to a significant cooling in interest rate-related trading during the rate cut cycle and a substantial decrease in commodity business revenue. In August, the group announced that Qin Xiao, co-head of the commodity business, resigned after only a few months in office, at a time when the business growth had already slowed significantly.

Goldman Sachs' investment banking revenue in the third quarter was about $1.87 billion, exceeding analysts' average expectations of $1.68 billion. Meanwhile, merger advisory fees were about $875 million. After lagging behind competitors in the second quarter, Goldman Sachs has now surpassed major competitor JP Morgan in this indicator.

Goldman Sachs' equity underwriting revenue in the third quarter was about $385 million, a significant 25% year-on-year increase, reflecting the continued strong recovery process of Wall Street investment banking business; while debt underwriting revenue in the third quarter was about $605 million.

In the third quarter, the overall revenue of Goldman Sachs' asset and wealth management-related business was about $3.75 billion, a 12% year-on-year increase. The group's management expenses in the third quarter increased by about 9%. The group reported that it raised $16 billion in funds in alternative businesses, most of which were related to credit strategies.

The consumer platform business at Goldman Sachs, internally referred to as the "bad bank," saw a revenue decline of about 32% to $391 million, due to losses related to the exit of business linked to General Motors, resulting in a pre-tax loss of approximately $559 million in Q3