Goldman Sachs has published data on the financial results of its activity in the third quarter of the current year, according to which the revenue and profit of this bank with headquarters in New York City for the mentioned period exceeded preliminary expectations for the corresponding dynamic.
The mentioned results are related to the high level of the lender figures in the area of stock trading and investment banking operations.
The revenue of the financial institution for the third quarter of the current year was fixed at $12.7 billion. This indicator showed an increase of 7% compared to the result for the same period in 2023. It is worth noting that the preliminary LSEG estimate provided that Goldman Sachs’s revenue for the third quarter of 2024 would be fixed at $11.8 billion.
Earnings for the mentioned period amounted to $8.40 per share. The preliminary LSEG estimate provided that the corresponding figure would be fixed at $6.89.
The profit of the financial institution for July-September of the current year amounted to $2.99 billion. This indicator increased by 45% compared to the result for the same period in 2023.
After the data on Goldman Sachs activity figures for the third quarter of the current year were published, the value of shares of the financial institution in premarket trading rose by 2.8%.
It is worth noting that the last two years for the bank have been a period, consisting of circumstances that cannot be described as favorable. In this case, the impact of such a process as the implementation by the Federal Reserve of a strategy of tightening monetary policy, implying a rapid increase in interest rates as a tool to counteract the growth of inflation. Against the background of the relevant actions of the financial regulator of the United States, a situation has emerged that is generally not favorable for investment banks such as Goldman Sachs. Currently, the mentioned situation is changing. This process is related to the fact that last month the Fed decided to start easing monetary policy, which implies lowering the cost of borrowing. Under the new state of affairs, Goldman Sachs has more opportunities to benefit. The relevant prospects are related to the fact that corporations that have waited on the sidelines to acquire competitors or raise funds begin to take action against the background of the starting of easing of the Fed’s monetary policy. Moreover, growing values strengthen Goldman Sachs’ asset and wealth management business.
The chief executive officer of the financial institution David Solomon, commenting on the results of the bank’s activities for the third quarter of 2024, said about an improvement in the operating environment.
The lender’s business related to equities trading generated $3.5 billion in revenue in July-September of the current year. This indicator increased by 18% compared to the result for the same period in 2023. LSEG’s preliminary estimate provided that the revenue of the mentioned bank’s business for the third quarter of 2024 would amount to $2.96 billion. In this context, it is worth noting that the lender reported strong results in both derivatives trading and cash trading.
The bank’s revenue from fixed-income trading for the third quarter of 2024 amounted to $2.96 billion. This indicator fell by 12% year-on-year. At the same time, the mentioned revenue exceeded preliminary expectations. The LSEG estimate provided that the corresponding figure would be fixed at $2.91 billion. The result in the mentioned area of the bank’s activity is associated with a slowdown in interest-rate products and commodities.
The revenue of the financial institution related to investment operations for the third quarter of 2024 was fixed at $1.87 billion. This indicator increased by 20% year-on-year. LSEG’s preliminary estimate provided that the bank’s revenue from investment activities for July- September 2024 would amount to $1.62 billion. A more favorable final result is associated with strength in debt and equity underwriting. The financial institution also stated that its backlog for pending deals increased from both year-on-year and compared to the figures for the second quarter of 2024.
The bank’s asset and wealth management business generated revenue in July-September of the current year, which was fixed at $3.75 billion. This indicator increased by 16% compared to the result for the same period in 2023. LSEG’s preliminary estimate provided that the mentioned business of the financial institution would generate revenue of $3.58 billion for the third quarter of 2024. Rising management fees and gains in investments contributed to higher final figures.
It is worth noting that last week JPMorgan Chase, which is the largest financial institution in the United States, released data on its results of operations for the third quarter of 2024, which also exceeded preliminary expectations. The forecast was surpassed largely due to high performance in the areas of trading and investment banking.
Besides, data on earnings of Wells Fargo, one of the largest creditors of the United States, for the mentioned period was released last week. In this case, the final results also exceeded the preliminary forecasts. To a large extent, these results are related to the indicators of the lender’s investment banking business.
