David Solomon, Goldman Sachs interview with David Faber, September 7, 2023.
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Goldman Sachs said Monday it beat second-quarter earnings and revenue estimates on better-than-expected fixed income results.
This is what the company said:
Earnings: $8.62 per share vs. $8.34 per share LSEG estimatesRevenue: $12.73 billion vs. $12.46 billion LSEG estimates
Goldman Sachs said profit jumped 150% from a year earlier to $3.04 billion, or $8.62 a share. The bank’s results a year earlier were held back by writedowns tied to commercial real estate and the sale of a consumer business.
Company-wide revenue rose a more modest 17% to $12.73 billion, driven by growth in the bank's core trading, advisory, and asset and wealth management businesses.
Fixed income was the highlight of the quarter, with revenue there jumping 17% to $3.18 billion, about $220 million more than StreetAccount estimates, driven by activity in interest rates, currencies and real estate trading.
Another boost for Goldman came from the company’s shrinking exposure to consumer loans: The bank’s provision for credit losses in the quarter fell 54% to $282 million, well below the Street Account’s estimate of $435.4 million.
Elsewhere, the bank’s results were just in line with expectations; for example, equity trading rose 7% to $3.17 billion, matching StreetAccount’s estimate, thanks to strong derivatives activity.
The bank's asset and wealth management division posted a 27% increase in revenue to $3.88 billion, also in line with StreetAccount estimates, thanks to gains in equity investments and higher management fees.
The company's Platform Solutions division saw revenue rise 2% to $669 million, beating estimates of $652.1 million, due to higher credit card balances and deposits.
But Goldman’s investment banking business underperformed its rivals, with investment banking fees rising 21% to $1.73 billion, just shy of the Street Account’s estimate of $1.8 billion. The shortfall appeared to be a smaller-than-expected advisory fee of $688 million, compared with an estimate of $757.3 million.
The 21% increase in investment banking fees charged by Goldman Sachs in the quarter looks mild compared to the more than 50% increases at both banks. J.P. Morgan Chase And City GroupJPMorgan in particular pointed to a flurry of activity toward the end of the period that boosted results.
Shares of New York-based Goldman Sachs fluctuated between gains and losses by less than 1% in premarket trading.
Expectations were high for Goldman Sachs as Wall Street’s business recovers from a dismal 2023. That’s because Goldman, among the six largest U.S. banks, is the most reliant on investment banking and trading for revenue.
On Friday, earnings from both JPMorgan and Citigroup beat expectations thanks to higher investment banking fees and better-than-expected stock trading results.
American bank And Morgan Stanley The results will be announced on Tuesday.
This story is under development. Please check back for updates.
