For many Americans, 2020 was a year to forget. For Goldman Sachs Group Inc., it was one for the record books.
Fueled by the markets’ quick recovery from the worst of the pandemic-induced recession, Goldman generated $44.56 billion in annual revenue, the most since 2009, harking back to the last time the bank successfully navigated a crisis and its aftermath. Trading revenue for 2020 reached a 10-year high.
The $4.51 billion in fourth-quarter profit that the Wall Street firm reported on Tuesday, or $12.08 per share, was more than double Goldman’s profit from the same quarter a year earlier. Both quarterly net income and quarterly revenue of $11.74 billion were much better than the expectations of analysts polled by FactSet, who forecast profit of $7.39 a share on revenue of $9.99 billion.
For the U.S. banking industry, 2020 was a roller-coaster year. Markets plunged and economic activity declined in the spring as the coronavirus spread across the country. With many businesses closed and many consumers out of work, banks girded themselves for widespread defaults. A robust federal spending program helped forestall the worst-case economic scenario, and in earnings reports last week, bank executives signaled the economy has held up better than expected.
On Friday, JPMorgan Chase & Co. said fourth-quarter profit soared 42% to a record $12.14 billion after the bank released $2.9 billion from its stockpile of funds previously set aside to cover soured loans. On Tuesday, Bank of America Corp. said profit fell 22% but topped analysts’ expectations after it released $828 million from its loan-loss reserves.
Source: WSJ
