Goldman Sachs Group Inc. reported sharply higher profit on Tuesday, looking more like the balanced firm Chief Executive Lloyd Blankfein has been working to build in the wake of the financial crisis.
The Wall Street firm’s profits rose 26% from a year ago, the biggest gain among the five big U.S. banks to have reported quarterly earnings so far. Morgan Stanley reports Wednesday.
Goldman’s traders broke out of their funk, riding renewed volatility in the markets to a three-year revenue high. A lower firmwide tax rate helped results, too.
Gains came from nearly every one of the firm’s businesses, including lending and asset management, two steadier, higher-return businesses that are far from Goldman’s roots as a Wall Street powerhouse. Debt underwriting, an area Mr. Blankfein has specifically targeted for growth, had its second-best quarter on record.
All in, the firm’s return on equity, a closely watched measure of profitability, stood at 15.4% in the quarter, its highest since late 2012.
“All this positivity is driving me crazy,” Mr. Blankfein joked in a Tuesday morning call with managing directors, according to attendees. “We’ve seen false dawns before.”