Goldman Sachs said quarterly profit almost tripled as gains in the value of its own investments contributed to the first year of revenue growth since 2009.
Fourth-quarter net income surged to $2.89bn (€2.2bn) from $1.01bn a year earlier, the New York-based company said.
Earnings for common shareholders, which include the cost of preferred stock dividends, rose to $2.83bn, or $5.60 a share, from $978m, or $1.84.
Chief executive Lloyd Blankfein has undertaken a $1.9bn expense-reduction effort since mid-2011 and said he expected earnings growth to resume when the economy and markets improved.
A stock-market rebound and a $500m profit from selling a hedge fund administration unit helped revenue recover from the lowest first half since 2005.
"It's always good to beat earnings expectations but I think there are clearly question marks about the sustainability of the investing and lending division", which makes investments with the firm's own money, said Richard Staite, a London-based analyst at Atlantic Equities.
Return on average common stockholders' equity, a measure of how well the firm reinvests shareholder money, rose to 10.7pc in 2012 from 3.7pc in 2011.
"The firm's strategic position provides a solid basis on which to grow and generate superior returns," Mr Blankfein said.
Full-year revenue jumped 19pc to $34.2bn from $28.8bn in 2011 and net income rose 68pc to $7.48bn from $4.44bn.
Compensation, the firm's biggest expense, climbed 6pc to $12.9bn and amounted to 38pc of revenue for 2012, down from 42pc.
Goldman's results came as JPMorgan boss Jamie Dimon had his pay cut in half after the lender concluded reviews of an investment unit's trading losses by finding he bears responsibility for the blunders.
Mr Dimon's compensation for 2012 was $11.5m, compared with $23m a year earlier, the New York-based bank said.
JPMorgan is seeking to rebuild investor trust after losing more than $6.2bn in the first nine months of 2012 on bets by UK trader Bruno Iksil, nicknamed the London Whale because his positions were so big.
Mr Dimon said the bank was almost done with losses at its chief investment office and would not disclose the size of future declines.
"Mr Dimon bears ultimate responsibility for the failures that led to the losses in CIO and has accepted responsibility," the bank.
The cut in Mr Dimon's compensation came as the lender reported fourth-quarter profit that rose 53pc. (Bloomberg)