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Investment banking Big deals help Goldman and JP Morgan rebound

July 16, 2014

A rush by big companies to embark on big deals and to raise money on the bond markets has helped Wall Street investment banks Goldman Sachs and JP Morgan to beat profit expectations over the last three months.

Goldman said revenues from investment banking were up 15% - outweighing a 10% drop in its traditional powerhouse of trading bonds, currencies and commodities.

The bank said it had set aside nearly $4bn (pounds 2.3bn) out of the last three months' revenues to pay annual bonuses at the end of this year. That sum is equal to 43% of revenues.

The rebound came despite the sluggish economy. The bank's boss Lloyd Blankfein said the results were pleasing given the "mixed operating conditions".

The bank also reported a big rise in profits from its private equity investments. Revenue from this business rose 46% on a year ago, to more than $2bn.

JP Morgan, meanwhile, reported a profit of $6bn compared with $6.5bn for the same quarter last year - again beating analysts' projections. Revenues over the quarter were down 3% to $24.5bn.

The results came a week after Jamie Dimon, JPM's chairman and chief executive, disclosed that he has throat cancer.

On a conference call, Dimon, 58, said the cancer had not spread. "I'm hoping the next time I talk about this at all, in eight weeks or something, I'll tell you . . . the prognosis is very good," he said. Dominic Rushe New York

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Source: Guardian (UK)

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