Goldman Sachs shares soar after bank defies market turbulence to beat revenue forecasts

Goldman Sachs shares have soared after the US bank defied market conditions to deliver stronger-than-expected earnings in the fourth quarter.

The bank posted revenue of $8.1bn (£6.3bn) in the three months to the end of December, higher than forecasts of $7.5bn and slightly up on the same period in 2017.

Shares in the New York-based bank jumped 6.7 per cent after it emerged from the market turmoil relatively unscathed.

But its fixed income trading division suffered from an 18 per cent revenue drop when compared with the fourth quarter of 2018.

Earlier this week Citi and JP Morgan posted disappointing results, with the former seeing revenue fall two per cent, as both blamed Wall Street’s nightmare end to the year.

Last month US stock markets suffered their worst December since 1931, with the S&P 500 down nine per cent and Dow Jones down 8.7 per cent, capping off the worst year for stocks since the financial crisis in 2008.

Goldman Sachs still managed to post equity trading revenue of $1.6bn, 17 per cent higher than the end of 2017 and above forecasts as traders fought their way through the market turbulence.

“We are pleased with our performance for the year, achieving stronger top and bottom line results despite a challenging backdrop for our market-making businesses in the second half,” chief executive David Solomon said.

The drop in bond trading revenue “reflecting significantly lower net revenues in credit products and interest rate products”, the bank said, but was offset by an impressive performance in its investing and lending division.

CMC Markets analyst David Madden said: “The shift more towards advisory work underlines the bank declining dependence on the financial markets for earnings.”