By Manya Saini, Noor Zainab Hussain and Saeed Azhar

(Reuters) – Goldman Sachs posted its best profit since the third quarter of 2021, driven by bankers taking in more fees from dealmaking, debt sales and trading strength, sending shares of this 3% before the bell.

Profit rose to $4.11 billion, or $11.95 per diluted share, for the fourth quarter ended Dec. 31, compared with $2.01 billion, or $5.48 per diluted share, a year earlier, the Wall Street giant said. on Wednesday.

Banking industry executives expect stronger dealmaking activity this year as the U.S. Federal Reserve cuts interest rates and President-elect Donald Trump’s pro-business comments stoke investor optimism. .

“We are very pleased with our strong results for the quarter and the year,” CEO David Solomon said in a statement. “I am encouraged that we have met or exceeded almost all the targets we set in our strategy to develop the company five years ago.”

Goldman’s investment banking fees rose 24% to $2.05 billion in the fourth quarter, driven by debt underwriting that benefited from strong leveraged finance and corporate bond sales.

An industry-wide recovery in mergers and acquisitions along with renewed activity in the equity and debt markets lifted results higher in the second half of 2024 for leading banks in Wall Street.

Within investment banking, equity and debt underwriting revenue jumped 98% and 51%, respectively, in the fourth quarter. Advisory revenue decreased by 4%.

Total (EPA:) investment banking revenue worldwide increased 26% to $86.8 billion by 2024, with North America up 33% from last year, according to data from Dealogic. Goldman has the second highest profit among banks worldwide.

Last month, Solomon said at a Reuters conference that dealmaking in equities and mergers and acquisitions could exceed a 10-year average by 2025.

Goldman’s asset and wealth management revenue rose 8% to $4.72 billion, while global banking and markets division revenue increased 33% to $8.48 billion in the fourth quarter.

The bank’s equity traders continued to ride a broader rally in the stock market in the last three months of 2024, with an increase in income of 32% to $ 3.45 billion.

US stocks hit record highs, fueled by optimism about the new administration’s economic policies, coupled with lower interest rates.

Fixed income, currency and commodities (FICC) trading also shined with a 35% jump in revenue.

Goldman announced a raft of leadership changes on Monday as it created a new division to focus on financing large deals and providing loans to corporate clients, seeking to leverage in the profitable private credit market.

Meanwhile, the Wall Street giant is winding down its poor consumer operations after losing billions of dollars. Solomon, who once championed the retail push, drew criticism for the strategy.

Goldman’s provisions for credit losses stood at $351 million for the fourth quarter, up from $577 million a year ago, primarily due to potential losses on its credit card portfolio.

Revenue for platform solutions, the unit that houses some of Goldman’s consumer operations, rose 16% to $669 million.

Goldman shares ended 2024 with a 48.4% surge, the largest increase among the six largest US lenders, and easily outperformed the market benchmark.

Rival JPMorgan Chase (NYSE: ) posted record annual profits, while Wells Fargo (NYSE:) profits also rose due to a rebound in dealmaking activity.

For 2024, Goldman expects earnings of $40.54 per share compared to $22.87 a year earlier. The Wall Street giant’s total revenue rose 16% to $53.51 billion.

It ends 2024 with a global workforce of 46,500, up 3% from a year ago.