Goldman Sachs reported a 20 per cent year-on-year increase in second-quarter profits on Wednesday, buoyed by a strong rebound in financial advisory services — a development that Chief Executive Officer David Solomon said signals a potential upswing in dealmaking activity.
The investment bank posted a quarterly profit of $3.5 billion, exceeding analyst expectations. Solomon, speaking during an earnings call, noted that the “level of dialogue” with corporate clients has intensified, reflecting growing CEO confidence in large-scale mergers.
He attributed the shift in sentiment partly to the Trump administration’s regulatory stance, which he described as more favorable to mergers and acquisitions (M&A) compared to the previous administration.
“There’s a greater confidence level among CEOs that significant, scaled industry consolidation is possible,” Solomon told analysts.
In a separate CNBC interview, Solomon added that he was observing a “little bit of an acceleration” in economic activity amid improved business sentiment, contrasting his April warning of recession risks during early tariff moves under President Trump.
Goldman’s performance was driven by strength across its financial advisory segment, with notable revenue gains in the Americas, Europe, the Middle East, and Africa. Its investment banking backlog also increased compared to the end of Q1, indicating more M&A and initial public offerings (IPOs) in the pipeline.
The bank’s markets division also delivered robust results, particularly in equities trading, where it saw significant revenue growth in financing and intermediation services.
These gains helped offset weaker performance in the Asset and Wealth Management unit.
The Q2 results align with strong earnings reported by peers such as JPMorgan Chase and Citigroup, further underscoring renewed optimism in the banking sector amid expected regulatory relief under the Trump administration — reforms that could free up billions in capital previously tied down by post-2008 financial rules.
Solomon described the current M&A environment as “remarkably resilient,” noting that deal volumes year-to-date are up 30 per cent compared to the same period in 2024, despite a sluggish start to the quarter.
He cited notable transactions such as NRG’s $12 billion acquisition from LS Power Equity Advisors and Salesforce’s $8 billion purchase of Informatica as indicators of renewed momentum in the space.
While early 2025 was marked by cautious deal activity amid shifting trade policy priorities, Solomon now sees stronger commitment from clients despite ongoing tariff uncertainties.
“It’s hard to say that confidence is not higher on July 15 than it was on May 15,” Solomon told CNBC. “And if confidence is higher, you’re going to see that in behavior.”
