Goldman Sachs Group Inc said its fourth-quarter earnings nearly tripled, driven by big gains in stock and bond values, increased revenue from dealmaking and lower compensation expenses.
Goldman, the fifth-largest U.S. bank by assets, reported earnings of $2.8 billion, or $5.60 per share, up from $978 million, or $1.84 per share, in the same period a year ago.
Analysts mostly had been forecasting much lower figures. Following its early morning report on Wednesday, Goldman shares were up 1.8 percent at $138 in premarket trading.
A significant part of Goldman's earnings boom came from improvements in market values in the stock and bond markets, as well as increased activity.
The New York-based investment bank said it took in "significantly higher" revenues from credit products and mortgages in its bond-trading business. Its investing and lending division, which mostly earns money from higher values on Goldman's own stock and bond investments, reported nearly $2 billion worth of revenue.
But gains were broad, with revenue up across each of Goldman's business lines, from investment banking to investment management. Overall, its revenue rose 53 percent to $9.2 billion from $6 billion in the fourth quarter of 2011.
Goldman's earnings were also helped by a sharp decline in compensation expenses, typically the biggest cost for Wall Street firms.
The bank said compensation fell 11 percent in the fourth quarter compared with a year ago. The expense was just 21 percent of net revenue, roughly half of what the firm usually pays out to employees.