Business appears to be booming at Goldman Sachs (GS). The investment banking, securities and investment management giant reported net revenue of $10.62 billion in the first quarter, its best quarterly performance in four years.
Goldman Sachs also reported net earnings of $2.84 billion for the first quarter. Its diluted earnings per common share were $5.94 compared with $4.02 for the first quarter of 2014 and $4.38 for the fourth quarter of 2014. According to Seeking Alpha, those results beat consensus estimates by $1.68 on a per share basis and by $1.27 billion in net revenue.
“We are pleased with our results this quarter and the fact that all of our major businesses contributed,” said Lloyd Blankfein, Goldman Sachs’ chairman and chief executive officer. “Given more normalized markets and higher levels of client activity, we remain encouraged about the prospects for continued growth.”
According to Goldman Sachs, its annualized return on average common shareholders’ equity was 14.7% for the first quarter of 2015.
Goldman Sachs also reported that net revenues in investment banking were $1.91 billion for the first quarter of 2015, 7% higher than the first quarter of 2014 and 32% higher than the fourth quarter of 2014.
Net revenues in financial advisory were $961 million, 41% higher than the first quarter of 2014, reflecting strong client activity, particularly in the United States. Industry-wide completed mergers and acquisitions increased compared with the same prior year period, Goldman Sachs said.
Goldman Sachs also reported net revenues in underwriting were $944 million, 14% lower than a strong first quarter of 2014, which reflect significantly lower net revenues in debt underwriting, principally due to a decline in leveraged finance activity.
Net revenues in equity underwriting were higher, reflecting a significant increase in net revenues related to secondary offerings, partially offset by a decrease in net revenues from initial public offerings. The firm’s investment banking transaction backlog decreased compared with the end of 2014, but was significantly higher compared with the end of the first quarter of 2014.
In its institutional client services division, Goldman Sachs reported net revenues in of $5.46 billion for the first quarter of 2015, 23% higher than the first quarter of 2014 and 73% higher than the fourth quarter of 2014. Net revenues in fixed income, currency and commodities client execution were $3.13 billion for the first quarter of 2015, 10% higher than the first quarter of 2014, due to significantly higher net revenues in currencies and interest rate products, partially offset by significantly lower net revenues in credit products, commodities and mortgages.
During the quarter, fixed Income, currency and commodities client execution operated in an environment generally characterized by higher volatility levels, which contributed to higher client activity levels, particularly in currencies and interest rate products, and improved market-making conditions compared with the fourth quarter of 2014.