As if showing that financial institutions staying with infamously unstable business can have a very profitable rewards, a 50 percent increase in quarterly earnings was reported by Goldman Sachs Group Inc (GS.N), as the previous month’s speedup of activity in the bond market assisted in the increase the revenue of trade.
As it, at one time, played a vital role in providing around 40 percent of the company’s revenue, the fixed-income, currency and commodities (FICC) business of Goldman, has been on a downturn since 2009, new rules on trading on own account had banks discouraged.
Thereafter a majority of large financial institutions has withdrawn trading operation or gave up the business altogether as doubts arise about a rebound of the industry.
This move by several banks, however, left a gap in the market. As a decisive move, Goldman and a few other banks took on clients and capitalize on the periods of market fluctuation such as the one that occurred in September
A very positive U.S. economic data, European Central Bank stimulus measures and the unexpected leaving of trading legend Bill Gross from the large bond-trading firm Pimco lead to the company’s revenue from trading bonds to leap up to 74 percent to $2.17 billion in the third quarter as well as giving the almost-lifeless market a good jolt.
The bank’s total net revenue jumped to 25 percent to $8.39 billion.
Including M&A, debt and stock underwriting, overall investment banking revenue went up 26 percent to $1.46 billion.
