Photo: Getty Images
On January 15, investment bank Goldman Sachs announced fourth-quarter 2025 earnings that exceeded market expectations, thanks to equity trading and asset management and employee benefits segments generating nearly $900 million more in revenue than anticipated. The bank's net profit increased 12% year-over-year to $4.62 billion, or $14.01 per share.
According to the financial report, total revenue in the fourth quarter reached $13.45 billion, a 3% decrease compared to the same period last year, due to the impact of transferring the Apple Card lending portfolio to JPMorgan Chase and the early termination of the contract with Apple.
Despite a slight decline in revenue, the business results show that Goldman Sachs' Wall Street-focused model remains effective in the current environment. High stock prices, a downward trend in interest rates, increased participation from investment institutions, and global instability affecting commodity and currency markets have created favorable conditions for investment banks.
CEO David Solomon said customer engagement continues to remain high across the system, and the bank expects growth to accelerate in 2026. According to Goldman Sachs, the recovery of capital markets and a more relaxed regulatory environment allow the bank, in the short term, to exceed group-wide targets for average-to-high returns and efficiency ratios of around 60%.
The biggest contributor to the better-than-expected results came from equity trading. Equity trading revenue increased 25% year-on-year to $4.31 billion, exceeding market estimates by approximately $610 million, thanks to trading financing and the sale of derivatives to hedge funds and institutional investors. Fixed-income trading revenue also increased 12% to $3.11 billion, exceeding forecasts by approximately $180 million, driven by interest rate and commodity-related transactions.
Investment banking fees rose 25% to $2.58 billion, driven by merger advisory and debt issuance. Goldman Sachs said year-end pending transaction volumes increased compared to the end of the third quarter, indicating a positive outlook for investment banking in the coming year. Meanwhile, asset management and benefits recorded revenue of $4.72 billion, nearly unchanged from the previous year but still about $270 million higher than forecasts.
On the stock market, Goldman Sachs shares fell more than 2% in pre-market trading after the report was released.