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(Sharecast News) - Shares in Goldman Sachs rose on Tuesday after the US investment bank reported its second-highest quarterly revenue on record, fuelled by a 72% surge in equities trading income.
The Wall Street giant reported net revenues of $18.68bn for the third quarter, up 23% year-on-year, while net profits rose 29% to $5.29bn.
Earnings per share climbed 39% to $17.01 from $12.25 a year earlier, though they fell from $20.98 in the second quarter. That growth came despite operating expenses increasing 20% to $11.31bn, reflecting higher transaction-related costs and employee compensation.
Equities trading was the standout performer, with revenues surging 72% to $6.44bn, driven by what the bank described as "significantly higher" revenues in equities financing and intermediation.
The former benefited from strong growth in prime and portfolio financing, while the latter was boosted by derivatives trading.
Meanwhile, investment banking fees increased 21% to $3.22bn, reflecting stronger merger and acquisition activity and higher revenues from equity and debt underwriting.
The bank said advisory revenues benefited from an increase in completed M&A transactions, while equity underwriting was supported by initial public offerings and secondary share sales.
Overall revenues in the global banking and markets division increased 32% to $13.46bn, although fixed-income, currencies and commodities trading revenues were broadly unchanged at $3.47bn.
Elsewhere, asset and wealth management revenues rose 14% to $5.05bn, supported by higher management and incentive fees.
Chief executive David Solomon said: "Against the backdrop of a complicated operating environment, our clients continued to turn to Goldman Sachs for our world-class advice, execution and financing capabilities, resulting in our second-highest quarterly net revenues and record year-to-date net revenues."
He added that the bank remained well positioned to deliver long-term earnings growth despite global uncertainty.
GS shares were up 1.3% at $906 by 1445 BST.