Goldman Sachs last Tuesday, October 17, published an earnings report for the third quarter of this year.
Net revenue of this financial institution, which is one of the largest investment banks in the world, in the period from July to the end of September amounted to $11.8 billion. This figure is lower than the result of $11.9 billion for the same period last year. Net revenue for the last quarter is also 8% higher than the level of financial performance that was recorded in the period from April to June.
Net profit of one of the world’s largest investment lenders for the third quarter amounted to $2.06 billion. For the same period last year, this figure was fixed at $3.07 billion.
Net revenue of the bank for the first nine months of this year amounted to $34.94 billion. The net profit of the lender for this period was fixed at $6.51 billion.
Currently, this financial institution focuses on such areas of activity as global banking operations and markets, asset, and wealth management.
The bank’s revenue received as a result of its bond trading activities for the third quarter amounted to $3.38 billion. The financial institution noted an increase in interest rates on products and mortgages made it possible to compensate for a decrease in the volume of trading in currencies, commodities, and traditional loans.
The bank’s efforts to increase the intensity of lending activities were not in vain. According to the results of the third quarter, this line of business of the financial institution brought in revenue of a record $730 million.
Stock trading in the period from July to the end of September allowed the lender to earn $2.96 billion. This result is due to the growth of activity in the derivatives market.
The revenue of the investment arm of the financial institution at the end of the third quarter was fixed at $1.55 billion.
Goldman Sachs differs from its competitors by a higher degree of dependence on investment activities and trading. Under the leadership of CEO David Solomon, efforts have been made to diversify revenue. Within the framework of this experience, the lender initially failed when trying to develop retail banking services. After the financial institution has focused on growth in the asset and wealth management area, its driving force is Wall Street. In the last quarter, such activities as trading and consulting had a share equal to two-thirds of the bank’s revenue structure.
Goldman Sachs has recently faced difficulties in two areas. The refusal of a financial institution from retail banking has provoked losses, as the lender finds buyers for unwanted operations. Goldman Sachs also suffered losses in the sphere of commercial real estate.
David Solomon said that the bank continues to make significant progress in implementing its strategic priorities. He also stated that he expected a recovery in the capital markets and strategic activities, provided that the favorable circumstances necessary for the implementation of this scenario will remain.
Wells Fargo analyst Mike Mayo noted in a research note that last quarter Goldman Sachs faced increased compensation costs and yields below the medium-term target.
As we have reported earlier, Goldman Sachs Reports Intensive Credit Card Losses Climbing.