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Goldman’s profit boosted by mortgage trades

Goldman Sachs Group Inc. on Tuesday said higher investment banking fees and smart bets in mortgage-backed bonds helped it beat earnings expectations.
/ Source: The Associated Press

Goldman Sachs Group Inc. on Tuesday said higher investment banking fees and smart bets in mortgage-backed bonds helped it easily beat Wall Street expectations for the fourth fiscal quarter.

The world’s largest investment bank reported profit after paying preferred dividends rose to $3.17 billion, or $7.01 per share, from $3.10 billion, or $6.59 per share in the year-ago period. Revenue for the three months ended Nov. 30 rose to $10.74 billion from $9.41 billion a year earlier.

Results surpassed Wall Street projections for a profit of $6.87 per share on revenue of $10.16 billion, according to analysts polled by Thomson Financial.

Lloyd Blankfein, the investment bank’s chairman and chief executive, has been hailed this year for sidestepping the mortgage losses that slammed rivals. During the fourth quarter, Goldman said it boosted assets under management from mortgages and earned about $500 million in trading of non-investment grade loans.

“Inherent in our commitment to our clients is the need to help them execute their transactions in all market conditions and, as a result, we are ever mindful of the importance of effective risk management,” Blankfein said in a statement.

Goldman’s results follow Lehman Brothers Holdings Corp., which last week said fiscal fourth-quarter profit declined but surpassed expectations. Morgan Stanley posts results on Wednesday, followed by Bear Stearns Cos. on Thursday.

Goldman’s stock climbed 29 percent during the fourth quarter to close November at $226.64.