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Goldman Sachs posted an 80 per cent rise in profits but lagged its Wall Street peers in the first quarter, failing to capitalise on a revival in risk appetite that saw many rivals post double-digit increases in revenues from trading.

Analysts had been set for a bright quarter from Goldman, following better-than-forecast figures last week from the investment-banking units of JPMorgan Chase, Citigroup and Bank of America, which reported results earlier this morning. Banks with big trading businesses have generally revelled in a pick-up in risk appetite among big clients such as hedge funds, following the election of Donald Trump in November.

But at Goldman, revenues from the core debt-trading business were essentially flat, at $1.69bn, while the M&A business saw revenues slip 2 per cent to $756m.

All told, net revenues came to $8.03bn for the period, 27 per cent higher than a volatility-hit period a year earlier, while net income rose 80 per cent to $2.16bn. But earnings per share were $5.15 on a diluted basis, well below the consensus analyst forecast of $5.34.

Shares slipped about 2 per cent in pre-market trading.

“The operating environment was mixed, with client activity challenged in certain market-making businesses and a more attractive backdrop for underwriting in our investment banking franchise,” said Lloyd Blankfein, chairman and chief executive. “As the economy improves, we are well positioned to not only meet our clients’ diverse needs, but also to generate operating leverage for our shareholders.”

The first quarter is traditionally the strongest of the year for investment banks, as big investors reset strategies and as companies look to front-load their fundraising efforts. 2016 got off to a very bad start, in that sense, as simultaneous slumps in stocks, bonds and commodities spooked clients such as hedge funds, while companies put off plans to raise money. The opening was Goldman’s worst since 2004.

But all five of the big US banks to have reported so far – Wells Fargo and PNC, in addition to Bank of America, JPMorgan Chase and Citigroup – put up better numbers in the first quarter than analysts had forecast, thanks in large part to a surge in revenues from trading.

At Citi, for example, fixed-income traders posted their best quarter in three years, with revenue rising 19 per cent from a year earlier to $3.62bn. At BofA, fixed-income trading revenue was up 29 per cent, excluding swings in the value of the bank’s own debt.

During Goldman’s earnings call, analysts will be hoping for commentary on the ways in which changes in the regulatory environment could develop to the bank’s advantage. Goldman has seen a succession of senior executives head to Washington since Mr Trump won power.

Investors are assuming that the new group of regulators puts an emphasis on optimising existing regulation, says Bill Smead, founder of Seattle-based Smead Capital Management, rather than further tightening standards on capital and liquidity.

Many feel that post-crisis constraints went too far, sapping vitality from the world’s largest economy, says Mr Smead.

“It is one thing to close the barn door after the animals get out,” he said. “It is another thing to put armed guards in front of the door so that the animals can’t get back in.”

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