Goldman Sachs posts big Q2 profit of $3.44 billion

Goldman Sachs posts big Q2 profit of $3.44 billion

Lloyd C Blankfein

The results continue a robust turnaround for the firm since it rode out the final tumultuous months of last year with the aid of a federal rescue. They come just one month after it paid back its $10 billion in federal aid.

Goldman’s profit was lifted by record quarterly revenues of $6.8 billion in its fixed income, currency and commodities unit, where mortgage and other credit instruments are traded, the bank said in a statement. This business has performed well since the bank has taken on greater levels of risk since the end of last year.

Challenging milieu

Its equity underwriting business also generated record net revenues, worth $736 billion in the second quarter, it said, as Goldman benefited among other things from a rush by other troubled banks to issue shares and raise their capital levels.

“While markets remain fragile and we recognise the challenges the broader economy faces, our second-quarter results reflected the combination of improving financial market conditions and a deep and diverse client franchise,” Goldman Sachs Chief Executive Lloyd C Blankfein said. Over all, Goldman’s net revenues were $13.76 billion, compared with $9.43 billion in the first quarter. But Goldman’s performance in particular is raising questions about how its rapid return to making strong profits will be perceived by lawmakers and taxpayers who helped it with the multibillion-dollar cushion last fall after the nation’s financial industry was shaken to its foundations.

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