Goldman Sachs' Trading, Wealth Groups Drive Jump in Profits

What You Need to Know

In the fourth quarter, the bank posted a $349 million gain from the sale of the former United Capital business.
Goldman’s asset- and wealth-management business posted revenue of $4.39 billion, up 23% from a year earlier.

Goldman Sachs Group Inc. topped profit estimates as its equities-trading unit posted a jump in revenue that was triple what analysts expected, capping off what it’s pitching as a year of transition.

The asset and wealth division helped drive the gains, posting its highest quarterly revenue in two years on a $349 million gain from the sale of Personal Financial Management. That helped counter fixed-income trading results and investment-banking fees that fell short of expectations.

“This was a year of execution for Goldman Sachs,” Chief Executive Officer David Solomon said in a statement Tuesday. “With everything we achieved in 2023, coupled with our clear and simplified strategy, we have a much stronger platform for 2024.”

Goldman Sachs is trying to put behind it a year in which dealmaking remained depressed and losses on real estate investments and the consumer business dragged down profit.

The company is more reliant than other major banks on dealmaking, and executives have linked a rebound in private equity as the key to ending a protracted slowdown in that business.

The firm, whose performance in 2023 fell short of its own targets, is refocusing efforts on its Wall Street business and money-management ambitions.

The equities unit generated $2.61 billion in revenue, a 26% jump compared to expectations for an increase of just about 8%. That left the bank more than $1.5 billion ahead of its closest rival, Morgan Stanley, for the full year, helping to once again cement its standing as the leader in that business.

Goldman shares, which rallied at the end of 2023 to post a 12% advance for the year, rose about 1% to $381.68 as oof 12:45 p.m. in New York.

Net income was $2.01 billion, or $5.48 a share, on $11.3 billion in revenue in the fourth quarter. Earnings were 51% higher than last year.

More Wealth, Other Results

Goldman’s asset- and wealth-management business posted revenue of $4.39 billion, up 23% from a year earlier. Management fees contributed the biggest chunk as the bank highlights what it hopes will be predictable growth in those fees, which previously were overshadowed by its principal bets.