Goldman Sachs Group, Inc. (GS) announced on Wednesday a significant increase in net profit for the fourth quarter, more than doubling from the previous year. This growth is attributed to robust performance across all operational segments and a decline in credit loss provisions. Both earnings per share and quarterly revenues exceeded analysts' expectations.
In pre-market trading on the New York Stock Exchange, GS shares rose by 3.23%, reaching $590.00, an increase of $18.47.
David Solomon, Chairman and CEO, expressed optimism, stating, "I’m encouraged that we have met or exceeded nearly all of the targets outlined in our five-year strategy to grow the firm. Consequently, we have increased our revenues by almost 50% while also strengthening the sustainability of our franchise."
For the fourth quarter, net earnings available to common shareholders skyrocketed to $3.92 billion, equating to $11.95 per share, compared to $1.87 billion or $5.48 per share in the same period last year.
According to Thomson Reuters, the consensus among 11 analysts was an earnings forecast of $8.35 per share for the quarter, excluding any special items.
The quarterly provision for credit losses decreased to $351 million from $577 million the prior year, mainly due to reduced net provisions associated with the credit card portfolio, primarily driven by net charge-offs.
Total operating expenses for the quarter were $8.26 billion, which represents a 3% decrease from the previous year. This reduction was primarily due to the FDIC special assessment fee in the prior year and lower costs associated with commercial real estate impairments in consolidated investment entities (CIEs), partially offset by increased transaction-related expenses.
Total net revenues for the quarter rose by 23% to $13.87 billion, compared to $12.70 billion in the same quarter of the previous year. This increase was driven by higher revenues across all segments, with notable growth in Global Banking & Markets. Analysts had predicted revenues of $12.46 billion for the quarter.
Net interest income saw a substantial increase of 75% to $2.35 billion, while total non-interest revenues grew by 15% to $11.52 billion compared to the prior year.
In the Global Banking & Markets segment, net revenues amounted to $8.48 billion, marking a 33% rise from the previous year. This was driven by strong results in Investment banking fees, Equities, and Fixed Income, Currency, and Commodities (FICC) financing.
The Asset & Wealth Management segment experienced an 8% rise in net revenues to $4.72 billion, primarily due to increased Management and other fees, significantly higher Incentive fees, and greater revenues from Private banking and lending.
Net revenues in Platform Solutions increased by 16% to $669 million from the previous year, driven by gains in Consumer platforms.
Additionally, the Board of Directors of Goldman Sachs Group, Inc. declared a common share dividend of $3.00, payable on March 28, 2025, to shareholders of record as of February 28, 2025.
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