Goldman posts stronger-than-expected Q1 results

investmentnews.com:

Goldman Sachs Group Inc.’s back-to-basics approach is paying off as it posted profits that vaulted past expectations.

The Wall Street giant recorded a 28% jump in net income in the first quarter, even as analysts braced for a drop from a year ago. That surprise surge was led by its traders — who eluded the slowdown at chief rival JPMorgan Chase & Co. — and by bankers who cashed in on a resurgence in dealmaking activity.

Goldman Sachs has sought to win back investors with a renewed focus on its core Wall Street business and a more predictable approach in its money-management unit. That comes after the firm’s management faced criticism for losing control of its retail-banking push and spent much of 2023scuttling that effort amid a broader slowdown, leading to underwhelming results.

As activity in capital markets ramps up again, analysts anticipate that Goldman is better positioned to benefit from that rebound. But a complete bounce back isn’t guaranteed, threatened by the still unpredictable Federal Reserve rate-cut moves and the onset of new global conflicts.

The reversal from 2023 was most apparent in one key metric. The bank reported return-on-equity of 14.8% for the first three months, in line with its longer-term targets and nearly double the dismal 7.5% it posted for 2023. The results also included a $78 million charge for an additional Federal Deposit Insurance Corp. special assessment stemming from last year’s regional-bank failures.

Net income was $4.13 billion, or $11.58 a share, on $14.21 billion in revenue in the first quarter. Goldman shares, which were roughly flat for the year heading into earnings, climbed about 2% to $397.00 at 7:25 a.m. in New York.

Fixed-income traders delivered $4.32 billion in revenue,