Goldman Sachs reported a strong performance for the third quarter, with results reflecting an increase year-over-year that exceeded Wall Street expectations. The firm's per-share earnings rose significantly to $8.40 for the September quarter, up from $5.47 a year earlier, outpacing the Capital IQ consensus estimate of $6.92.
Revenue experienced a 7% growth, reaching $12.7 billion, which was also above the expected $11.76 billion. Chief Financial Officer Denis Coleman highlighted during a recent earnings call that the company's overall performance demonstrated the robustness of its client franchise and the improving operational environment.
Global banking and markets revenue accounted for a 7% increase, reaching $8.55 billion, buoyed by an impressive 20% rise in investment banking fees, totaling $1.87 billion. CEO David Solomon emphasized that while investment banking revenues have shown improvement, they have yet to return to their 10-year average levels regarding merger and acquisition and equity volumes. Within the global banking and markets sector, fixed income, currency, and commodities net revenue saw a decline of 12%, landing at $2.96 billion.
Coleman noted that this drop occurred during a relatively quiet summer period, but there was a substantial uptick in activity observed in September. Conversely, revenue derived from equities climbed 18%, reaching $3.5 billion, underscoring the strength of the equities market during this quarter. The asset and wealth management segment flourished, with revenues increasing by 16% to $3.75 billion, driven by notable equity investment gains and elevated management and advisory fees.
Total assets under supervision surged to $3.103 trillion, a substantial increase from $2.680 trillion from the previous year. However, it's worth mentioning that platform solutions revenue took a significant hit, plummeting 32% to $391 million. In terms of operating expenses, Goldman Sachs managed to reduce costs, decreasing to $8.32 billion from $9.05 billion in the same quarter the previous year.
The provision for credit losses also rose dramatically, reaching $397 million compared to a mere $7 million from the prior year. Solomon also shared insights regarding the broader economic context, noting that the onset of the rate cut cycle has re-energized optimism about a soft landing, which he believes would stimulate increased economic activity.
Additionally, he pointed out that clients are significantly focused on the trajectory of interest rates across various jurisdictions, the potential policy implications stemming from global elections—particularly in the United States—and the prevailing high levels of geopolitical instability. In related news, last month, the Federal Reserve made a pivotal decision to lower its benchmark lending rate by 50 basis points, bringing it to a range of 4.75% to 5%, marking its first cut since March 2020.
This decision follows a period of tightened monetary policy that lasted from March 2022 through July 2023, aimed at combating inflation..