Goldman Sachs, a leading global investment bank, reported its strongest quarterly profit in five years, driven by a record-breaking performance in equities trading that offset an unexpected decline in fixed-income revenues.
In the first quarter (Q1) of 2026, the investment bank generated $17.23 billion in revenue, surpassing analysts’ expectations and marking a 14% increase compared to the same period in 2025, as well as a 28% rise from the previous quarter. Profit surged by 19%, while earnings per share came in at $17.55, beating forecasts of $16.49.
A major highlight of the quarter was the firm’s equities division, which delivered more than $5 billion in revenue, exceeding its own record set just a quarter earlier by over $1 billion.
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This strong performance helped cushion weaker results in fixed-income, currency, and commodities (FICC), where revenues fell 10% year-over-year to $4.01 billion due to declines in interest rate products, mortgages, and credit products.
Chairman and CEO at Goldman Sachs David Solomon commented on the milestone stating,
“Goldman Sachs delivered a very strong performance for our shareholders this quarter, even as market conditions became more volatile. Our clients continue to depend on us for high-quality execution and insights amid the broader uncertainty, and we remain confident in how we’ve positioned our businesses. The geopolitical landscape remains very complex – so disciplined risk management must remain core to how we operate.”
The firm’s Global Banking & Markets division generated $12.74 billion in revenue, representing a 19% increase year-over-year. Investment banking fees rose sharply by 48% to $2.84 billion, largely driven by a surge in completed mergers and acquisitions, alongside stronger equity underwriting activity, particularly in convertible offerings.
Debt underwriting also improved, supported by higher investment-grade and asset-backed activity, though partially offset by weaker leveraged finance. Equities revenues climbed 27% year-over-year to $5.33 billion, fueled by gains in both financing, especially prime financing and intermediation, including cash products.
Meanwhile, revenues in the other segment rose significantly to $561 million, reflecting higher gains from direct investments. In Asset & Wealth Management, revenues reached $4.08 billion, up 10% year-over-year but down 14% from the previous quarter.
Growth was driven by higher management fees due to increased assets under supervision, although this was partially offset by weaker performance in private banking and lending, largely due to lower deposit spreads tied to Marcus deposits.
Provision for credit losses rose to $315 million, reflecting growth and impairments in wholesale loans, compared to $287 million a year earlier. Operating expenses also increased by 14% year-over-year to $10.43 billion, driven by higher transaction-related costs and compensation expenses. Despite this, the firm maintained a stable efficiency ratio of 60.5%.
Litigation and regulatory provisions stood at $42 million, compared to a net benefit of $11 million in the same period last year. Despite the strong earnings performance, investor sentiment remained cautious.
Shares of Goldman Sachs declined following the results, weighed down by the drop in bond-trading revenue and reduced lending activity to wealthy clients. Broader concerns surrounding geopolitical tensions, particularly the ongoing Iran conflict, also continue to cast a shadow over the financial sector’s outlook.
Outlook
Goldman Sachs is heading into the remainder of 2026 with a cautiously optimistic outlook, underpinned by strong trading performance and a resurgence in dealmaking activity. However, the bank’s forward trajectory remains closely tied to global economic conditions and rising geopolitical uncertainties.
Global economic projections remain supportive. Goldman Sachs anticipates global GDP growth to hover around 2.8% to 2.9% in 2026, slightly above broader market expectations.
This steady expansion is expected to provide a favorable backdrop for financial markets, particularly equities, where the bank maintains a constructive stance. While returns may moderate compared to the previous year, earnings growth and broader market participation are expected to sustain momentum.
A key pillar of optimism lies in the continued recovery of investment banking. The firm has already seen a sharp rise in mergers and acquisitions activity, and this trend is expected to persist if market stability improves. A gradual reopening of the IPO market could further strengthen fee-based revenues, reinforcing Goldman Sachs’ position in global dealmaking.