Big gains in trading fueled earnings at Goldman Sachs. Citigroup's profit shot higher as well, benefiting mostly from lower costs. Fred Katayama reports.
Goldman Sach's commitment to trading paid off handsomely. Its quarterly profit surged 40 percent, trouncing analysts' estimates. Revenue rose to its highest level in four years. Turbocharging results: big revenue gains in fixed income, currency and commodities. Goldman took advantage of higher volatility and activity in foreign exchange and bonds. Also contributing: investment banking, driven by an increase in mergers and acquisitions. Goldman CEO Lloyd Blankfein said, "Given more normalized markets and higher levels of client activity, we remain encouraged about the prospects for continued growth." Goldman shares adding to their 4 percent gain this year in early trading. Citigroup's earnings surged as well, benefiting mostly from lower costs. It has been selling retail operations overseas and shrinking its domestic branch network. Like Bank of America, its legal expenses plunged. Citi also managed to boost profit at its consumer and corporate banking unit. But unlike Goldman and JPMorgan, its trading revenue fell. Citi's shares rose in early trading.