Goldman Sachs on Monday, July 15, published information on its losses and profits for the second quarter of the current year.
The mentioned results of the specified financial institution, which is one of the largest in the United States, exceeded preliminary expectations.
Goldman Sachs’ profit for April-June of the current year was recorded at $3.04 billion. This indicator showed an increase of 150% compared to the result for the second quarter of 2023. Also, earnings are $8.62 per share. It is worth noting that LSEG’s estimate assumed that the mentioned figure would be fixed at $8.34.
It’s also worth noting that the financial institution’s results last year were significantly reduced by write-downs related to commercial real estate and the sale of a consumer business.
Goldman Sachs’ revenue for April-June 2024 was $12.73 billion. This figure increased by 17% compared to the result for the second quarter of last year. The positive dynamic of the financial institution’s revenue is largely due to the lender’s rising core operations in the areas of trading, advisory, and asset and wealth management. LSEG’s preliminary estimate provided the mentioned figure for last quarter was supposed to be $12.46 billion.
The financial institution’s fixed income for April-June 2024 was recorded at $3.18 billion. This figure increased by 17% year on year. The fixed income the bank reported was about $220 million higher than StreetAccount’s preliminary estimate. The result, which exceeded expectations, became a reality due to the lender’s activity in the interest rate, currency, and mortgage trading markets.
Goldman Sachs’ provisions for credit losses fell 54% in the second quarter of the current year compared with the 2023 figure. The corresponding figure was recorded at $282 million. StreetAccount’s preliminary estimate provided the specified financial institution’s reserves supposed to be $435.4 million.
The bank’s revenue directly from equities trading activities for April-June of the current year was recorded at $3.17 billion. This figure increased by 7% year on year. It is worth noting that the mentioned result coincided with the preliminary expectations of StreetAccount. In this case, the result is due to strength in derivatives activity.
The bank’s asset and wealth management unit generated a 27% year-on-year increase in revenue to $3.88 billion in the last quarter. The mentioned result matched the StreetAccount preliminary estimate. In this case, a significant contribution to the increase in revenue was made by the growth in the volume of gains in equity capital and the rise in management fees.
The lender’s unit, specializing in platform solutions, recorded revenue of $669 million for April-June of the current year. This indicator increased by 2% year on year. The preliminary estimate of StreetAccount regarding the revenue of the mentioned unit of the bank provided that the corresponding figure would be $652.1 million. In this case, the positive result is associated with an increase in credit card balances and deposits.
Goldman Sachs’ investment banking business generated results that were negatively in line with prior expectations. Fees for the mentioned services for the second quarter of 2024 amounted to $1.73 billion. This figure increased by 21% year on year. At the same time, StreetAccount’s preliminary estimate pegged investment banking fees for the last quarter would be $1.8 billion. The bank’s advisory fees for the mentioned period amounted to $688 million. StreetAccount’s preliminary estimate pegged the specified figure would be $757.3 million for the last quarter.
Goldman Sachs Chief Financial Officer Denis Coleman said during the conversation with the media that the lender remains the number one player in the merger market.
During afternoon trading, shares of the financial institution rose in price by more than 1%.
Expectations for Goldman Sachs’ performance were high as Wall Street businesses now see a recovery from a dismal 2023. It’s worth noting that the mentioned lender, of the six largest financial institutions in the United States, is the most reliant on investment banking and trading to generate revenue.
Goldman Sachs Chief Executive Officer David Solomon said the bank remains well-positioned to benefit from the ongoing resurgence in activity. He made the corresponding statement during a conference call with analysts.
Kenneth Leon, research director at CFRA Research, says that Goldman Sachs is poised for higher earnings from investment banking fees given the significant increase in its backlog.
As we have reported earlier, Wells Fargo Reports Second-Quarter Profit.
