A rebound in underwriting, transactions, and bond trading in the first quarter propelled Goldman Sachs’ (GS.N) opening new tab profit beyond Wall Street projections, bringing its earnings per share to the highest level since late 2021. 

US Interest Rates

The bank’s shares increased by more than 3% on Monday following news of a robust recovery in investment banking, the institution’s traditional basis, following a two-year decline.

Rivals JPMorgan Chase (JPM.N) and Citigroup (C.N), who announced profits that above market forecasts on Friday, also opened new tabs and mentioned favorable circumstances for deal making.

However, its leaders also issued a warning regarding threats to the economic outlook, such as the unpredictable trajectory of US interest rates.

In contrast to rival Morgan Stanley’s (MS.N) over 7% decline this year, the bank’s shares has increased by more than 4%, opens new tab.

CEO David Solomon stated on a conference call that “we’re in the early stages of a reopening of capital markets,” citing strong debt underwriting activity and investors’ growing willingness for risk in IPOs.

Headline Risks

“We continue to be constructive on the health of the U.S. economy.” The profits were a “near-perfect print,” according to a report by Oppenheimer analyst Chris Kotowski, with major profit drivers above estimates.

Solomon may feel less pressure as a result of the outcomes after his attempt at consumer banking failed miserably, igniting resentment and leading to senior exits.

According to Stephen Biggar, a banking analyst at Argus Research, “a recovery in a number of capital market sensitive revenue areas may finally be underway, while an exit from the misguided entry into consumer businesses has removed some headline risk.”

Leading M&A advisor, Goldman handled some of the largest transactions of the previous year, including Exxon Mobil’s (XOM.N), opens new tab $60 billion acquisition of Pioneer Natural Resources.