Goldman Sachs thrives on global dealmaking frenzy to post bumper profit

NEW YORK: Goldman Sachs Group Inc reported a 66% surge in third-quarter earnings that swept past expectations on Friday, as Wall Street's biggest investment bank rode a record wave of M&A activity that has also boosted profit for other big U.S. banks.

Net earnings applicable to common shareholders rose to $5.28 billion in the quarter ended Sept. 30, from $3.23 billion a year ago.

Earnings per share rose to $14.93 from $8.98 a year earlier. Analysts on average had expected a profit of $10.11 per share, according to the IBES estimate from Refinitiv.

Goldman, which generates a third of its revenue from its investment bank through lucrative fees from advising on deals, reported a surge in advisory fees, as large companies and financial sponsors embarked on a slew of transformative deals.

Total revenue surged 26% to $13.61 billion in the quarter.

Global M&A volumes have shattered all-time records, with advisors struggling to cope with transaction volumes never seen before.

Deals worth more than $1.5 trillion were signed by the world's biggest investment banks in the September quarter, with

Goldman comfortably topping the league tables for worldwide M&A advisory, as per Refinitiv data.

The league tables rank financial services firms on the amount of M&A fees they generate.

Overall financial advisory revenue jumped 225% to $1.65 billion, while underwriting revenue surged 33% to $1.90 billion.