Business

Goldman Sachs profits leap 50% as bond market takes off

Financial professionals sit in the Goldman Sachs Image copyright Getty Images
Image caption Goldman Sachs profits benefited from a 74% jump in bond revenue

US investment bank Goldman Sachs has reported a 50% jump in third-quarter profit after a sudden jolt in bond market activity helped boost revenues.

The bank reported net income rose to $2.14bn (£1.33bn) in the three months to the end of September.

That compared with $1.43bn for the same period a year earlier.

Revenue from bond-trading leapt 74% to $2.17bn, as Goldman benefited from the surprise exit of bond market supremo, Bill Gross, from US giant Pimco.

The departure of Mr Gross from Pimco, the world's largest bond fund, prompted investors to withdraw $23.5bn from the company.

Strong US economic data in September and stimulus measures introduced by the European Central Bank (ECB), also helped jolt what had been a lacklustre bond market into life last month.

Total net revenue at the bank rose 25% to $8.39bn.

"The combination of improving economic conditions in the US and a strong global franchise continued to drive client activity across our diverse set of businesses," Goldman's chairman and chief executive Lloyd Blankfein said in a statement.

But perhaps in recognition of the recent stock market sell off, Mr Blankfein also acknowledged that "conditions and sentiment can shift quickly."

Goldman Sachs has also been a big beneficiary of rising stock markets this year, helped by its advisory work on large deals including the $25bn initial public offering of Chinese tech firm Alibaba on the US stock market.

Revenue from investment management, a business Goldman has been trying to build up, rose 20% to $1.46bn.

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