(Bloomberg) -- Goldman Sachs Group Inc.’s investors were skeptical, its profits were slumping and its chief executive officer found himself under pressure. About a year later, David Solomon can smile.

“When times are good, things feel good,” Solomon said in an interview with Bloomberg Television from a summit on French business in Versailles. “When times are tougher, things don’t feel as good.” If smart colleagues work together and can serve clients, “we’ll do just fine.”

The bank’s stock has hit record highs, thanks in part to a first-quarter jump in net income led by its traders, along with bankers who are capitalizing on a dealmaking rebound.

After a long quiet spell, the market for initial public offerings “has opened up,” Solomon said. Yet he worries that “fewer and fewer” companies are going public. 

“That is concerning,” he said. “There’s obviously an abundance of capital available in private markets, but I do think it’s important that we have open, accommodative, strong public markets.”

The level of activity will pick up in the second half, but “won’t be as robust as it was during 2021,” he added. Enthusiasm for mergers and acquisitions has also rebounded, Solomon said. He anticipates more normalized levels of deal activity by year end. 

Read More: Goldman’s CEO Says He’s Optimistic About 2024 as Markets Rebound

Goldman’s recent run has been tumultuous, especially thanks to its ill-fated push into retail banking. The bank spent much of last year dismantling that effort amid a broader slowdown, aiming to win back investors by focusing on the core Wall Street work of trading and investment banking. That back-to-basics approach has paid off as the bank reorients itself as a simpler firm.

Another key part of that strategy is expanding the asset and wealth management business, which eases its reliance on volatile trading revenue.

The bank has “room to grow” there, Solomon said. He’d consider a major acquisition, though the bar for something “very significant or transformative would be very, very high.”

‘Chugging along’

Solomon is also feeling good about the economy, saying it’s “chugging along pretty well.” Earlier this year, he said inflation is likely to be stickier than markets have anticipated. His fellow chief executives, he said then, have told him that economic conditions for lower-income consumers have been getting tougher, leading to spending changes.

This month, Goldman said it was rehiring Rob Kaplan, who’d spent more than 20 years there before becoming president of the Federal Reserve Bank of Dallas. He’ll be a vice chairman and member of the firm’s management committee.  

“We decided he should come home,” Solomon said, adding that it puts another senior leader in Dallas for the bank.

Kaplan stepped down from the Dallas Fed following revelations that he had traded stock during the pandemic, while the Fed intervened in public markets across a wide array of assets. A report published in January said that Kaplan didn’t violate laws or policies, while noting that he didn’t report the dates his trades were executed on or transactions involving options contracts. The Fed’s internal watchdog said he created the “appearance of a conflict of interest.”

Even when Goldman’s stock price was up and down last year, Solomon didn’t lose faith in his bank: “I’ve always felt good about Goldman Sachs.”

--With assistance from Jonathan Ferro.

(Updates with further comments from executive from sixth paragraph.)

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