NEW YORK -- Investment bank Goldman Sachs posted a massive 41% rise in revenues in the second quarter, the bank said Wednesday, helped by a blowout performance by the bank’s trading desks.
The bank’s global markets division had net revenues of $7.18 billion in the quarter, up 93% from a year earlier. Most of that gain was in Goldman’s trading specialty of bonds, commodities and currencies, but the bank also had a big jump in revenue from its stock-trading operations.
Goldman has a small, but growing, consumer banking business through its Marcus personal loans and savings accounts as well as acting as the bank for Apple’s credit card. So the bank was not immune to the virus-driven economic slowdown, which has caused millions of Americans to lose jobs and businesses to close and ultimately stop paying their debts.
Goldman had to set aside $1.59 billion to cover potentially bad loans in the quarter, up sharply from the $214 million it set aside a year earlier. However that figure is significantly smaller than the amounts JPMorgan Chase, Citigroup and Wells Fargo had to set aside, mostly reflecting the small size of Goldman’s consumer banking business compared to its competition.
The bank’s return on equity, which measures how well an investment bank is performing with the assets that it holds, was 11.1% in the quarter. Typically banks like Goldman want to keep that figure above 10%.
Goldman shares rose 79 cents to $214.79 in midday trading.