Goldman Sachs, Citi see earnings surge as M&A rebounds

(Sharecast News) - Goldman Sachs and Citigroup posted a surge in quarterly profits on Tuesday, as improving demand helped bolster Wall Street's banks.

Goldman posted a 37% surge in third-quarter profits to $4.10bn. Net revenues rallied 20% to $15.18bn, fuelled by strong demand for its core investment banking and trading services.

Investment banking fees soared 42%, primarily due to "significantly" higher net revenues in advisory as mergers and acquisition volumes picked up, Goldman noted.

Net revenues in fixed income, currency and commodities strengthened 17% at $3.47bn.

David Solomon, chief executive, said: "This quarter's results reflect the strength of our client franchise and focus on executing our strategic priorities in an improved market environment."

At Citi, third-quarter net income jumped 16% to $3.8bn. Revenues were $22.1bn, up on last year's $20.2bn and comfortably in line with expectations.

The bank saw improved revenues across its main divisions, including investment banking and wealth management. It also posted a 5% fall in net credit losses in its retail division, which it attributed to an "improved credit performance in retail services".

Jane Fraser, chief executive, said: "The relentless execution of our strategy is delivering stronger business performances quarter-after-quarter and improving our returns."

A slew of US banks are posting earnings this week. As well as Goldman and Citi, markets also heard from JPMorgan Chase and Wells Fargo on Tuesday.

The sector has benefited from a flurry of deal-making over the last few months as well as extremely active markets, despite the wider economic uncertainty and mounting geopolitical risk.

However, both Solomon and JPMorgan's veteran head Jamie Dimon warned on Tuesday that markets were at risk of tipping into "bubble territory".

Bank of America and Morgan Stanley are due to publish quarterly numbers on Wednesday.