Goldman Sachs boasts best quarter in five years

Goldman Sachs broke out of a rut on Tuesday after reporting a surge in bond trading — signaling a turnaround in a business that has been a drag on earnings this year.

The Wall Street bank raked in $1.96 billion in revenue from trading bonds, currencies and commodities during the third quarter, up 34 percent from the same period a year ago.

That rise drove a 47 percent increase in total revenue, to $2 billion, beating analysts’ estimates.

“It’s the best quarter we’ve had in five quarters,” Chief Financial Officer Harvey Schwartz said during a call with analysts.

Goldman has struggled this year to show that it can weather the rough markets and up until now has produced only mediocre returns. The first quarter saw profits plunge 60 percent, marking the steepest drop during CEO Lloyd Blankfein’s tenure.

The bank announced that it would lay off 10 percent of its bond traders and salespeople.

Prominent securities analyst Dick Bove had criticized the chief executive for creating a “lost decade” by doubling down on trading and investment banking — businesses squeezed by low interest rates and regulatory pressures.

Wall Street is generally reporting positive results this quarter, with JPMorgan and Bank of America beating expectations as well.

During the analyst call, Schwartz also touted Marcus, Goldman’s first lending program for the non-wealthy rabble that launched last week.

“I got an email last evening that we booked our first loan,” Schwartz said.

Goldman’s shares were up $2.91 to $171.91 in late morning trading.

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