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That’s not necessarily a bad thing, as Goldman’s better-than-expected profit was thanks in part to volatility. The Wall Street powerhouse, which has long been known, and sometimes criticized, for its traders’ dexterity, recorded a 55 percent jump in second-quarter revenue from the buying and selling of bonds, currencies and commodities, a better result than at rival banks.
Morgan Stanley, Goldman’s closest rival, reported that its revenue in the same business rose 49 percent over the same period. Citigroup, the only other bank to beat second-quarter expectations, recorded a 31 percent rise in bond trading revenue.
Nonetheless, Goldman’s results, like those of other big banks this quarter, reflected the damage of inflation, shakier economic conditions and a downturn in deal-making, which has led to fewer acquisitions, venture capital investments and stock and bond market offerings. Revenue from Goldman’s investment banking division fell 41 percent in the second quarter, versus the same period a year ago. The firm said its backlog of deals fell in the quarter, but did not say how much.
In addition, Goldman, which has been building up its presence in consumer banking and lending, set aside $667 million for potential loan losses.
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