Merger fees lift Goldman Sachs profits as it warns of volatility

A screen displays the the company logo for Goldman Sachs on the floor at the New York Stock Exchange in New York, May 7, 2025. Reuters-Yonhap

Goldman Sachs reported strong first-quarter earnings on Monday, propelled by increased merger advisory fees as it warned of greater volatility amid geopolitical complexity.

The New York-based investment bank scored an 18 percent jump in quarterly profit to $5.4 billion, citing a "significant increase in completed mergers and acquisitions volumes."

Revenues rose 14 percent to $17.2 billion.

While CEO David Solomon did not explicitly flag the U.S.-Israel war against Iran, his statement alluded to heightened international tensions.

"Goldman Sachs delivered very strong performance for our shareholders this quarter, even as market conditions became more volatile," Solomon said in an earnings powerpoint presentation.

"The geopolitical landscape remains very complex — so disciplined risk management must remain core to how we operate," he said.

Monday's batch of results marked the third in a row in which Goldman flagged completed deals as a positive driver. Investment banking fees surged 48 percent in the quarter amid the strong mergers and acquisitions (M&A) flow.

The firm also saw an uptick in operating expenses in the period, partly due to the M&A surge. The powerpoint alluded to "significantly higher transaction based expenses."

Revenues fell for fixed income, currency and commodities due to weakness in interest rate products and some other categories. However, this was partially offset by increases in commodities and currencies.

Revenues also rose in equities trading.

Since U.S. and Israeli forces attacked Iran on Feb. 28, the surge in oil prices has dominated financial markets, often dictating trading dynamics in equities and other assets.

Increased volatility usually translates into higher trading revenues for Goldman.

Goldman shares fell 4.3 percent in pre-market trading.