By Aparajita Saxena and Elizabeth Dilts
(Reuters) - Goldman Sachs topped analysts' revenue estimates on Wednesday as strength in its equities desk and M&A advisory cushioned losses from bond trading, making it the only Wall Street bank so far to show growth in fourth-quarter trading revenue.
Heightened market volatility and widening credit spreads in the fourth quarter reduced bond revenue for JPMorgan Chase and Citigroup. But equity traders remained busy as investors changed positions in a choppy market.
Goldman, which is more sensitive to market fluctuations than its peers, said overall trading revenue rose 2 percent in the three months ended December. Equities trading revenue jumped 17 percent to $1.60 billion, while bond trading revenue slid 18 percent to $822 million, far from its peak of more than $6 billion.
Citi's bond trading revenue fell 21 percent, JPMorgan saw a 16 percent fall, while Bank of America, which reported earlier in the day, posted a 15 percent drop.
Investment banking, a business Goldman is trying to bolster to lower its dependence on market sensitive trading, fell 5 percent to $2.04 billion. Revenue in its financial advisory business surged 56 percent, boosted by higher fees from dealmaking. Revenue from equity and debt underwriting fell.
Goldman's net earnings attributable to common shareholders reached $2.32 billion, or $6.04 per share, in the quarter, compared with a loss of $2.14 billion, or $5.51 per share, a year earlier.
Analysts were looking for a profit of $4.45 per share, according to IBES data from Refinitiv, although it was not clear if the numbers were comparable.
The year-ago results included a one-off charge related to a change in U.S. tax laws.
Total net revenue was $8.08 billion, above analysts' average estimate of $7.63 billion.
Goldman's shares rose 2.51 percent in early trading on Wednesday. The stock has fallen 30 percent over the last 12 months, and over 25 percent in the fourth quarter, after reports of the bank's involvement in the Malaysian 1MDB scandal emerged.
The company did not provide an update on any expenses related to the scandal in its press statement, but said in its presentation that Chief Executive Officer David Solomon is expected to provide commentary on the matter during a conference call with analysts later on Wednesday.
(Reporting By Aparajita Saxena in Bengaluru; Editing by Sai Sachin Ravikumar and Saumyadeb Chakrabarty)
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