That backdrop plays perfectly with the strengths of Goldman Sachs, which is much more exposed to Wall Street than Main Street.
Goldman Sachs (GS) Reported revenue increased to $ 13.3 billion, eliminating estimates of $ 9.8 billion. It was Goldman’s second highest quarterly income.
Although net earnings remained flat at $ 2.4 billion, that contrasts sharply with the sharp falls in earnings reported Tuesday by JPMorgan Chase (JPM) and Citigroup (C). Wells Fargo (WFC), the largest bank most closely linked to Main Street, suffered its first loss since the 2008 financial crisis.
Earnings per share increased 8% at Goldman Sachs to $ 6.26, far exceeding expectations of $ 3.78.
Goldman Sachs CEO David Solomon acknowledged the “very challenging environment” and said the economic outlook “remains uncertain.”
Goldman Sachs shares rebounded 4% before trading at the profit pace. The bank has only dropped 7% so far this year, compared with a 36% drop for the year. KBW Bank Index (BKX).
The return of greed has been good for Goldman Sachs
Goldman Sachs reported record investment banking revenue of $ 2.7 billion, including record revenue for signing debt and equity deals.
That deal was only possible thanks to the return of greed on Wall Street. The Federal Reserve’s unprecedented action – dramatically lowering rates to zero, buying unlimited amounts of government debt, and even collecting corporate bonds – unfreezes capital markets. That paved the way for a resurgence in equity and debt sales for which Goldman Sachs and other Wall Street banks earn high commissions.
US companies raised nearly $ 190 billion just through the sale of shares during the second quarter, the most on record for Dealogic since 1995. That includes the high-profile IPOs of online insurer Lemonade, the software firm. ZoomInfo and the Albertsons supermarket chain. Goldman Sachs said it ranked # 1 worldwide in stock sales this year. And it is number 1 for advising on M&A offers.
Meanwhile, Goldman’s trading business, which has stumbled in recent years, is thriving on market turmoil and increasing business activity from clients such as hedge funds and portfolio managers.
The bank’s fixed income, currency and commodities unit generated $ 4.2 billion in revenue, the highest in nine years. Goldman cited “strong customer activity.”
Goldman’s equity unit posted revenue of $ 2.9 billion, the highest in 11 years.
Like other banks, Goldman Sachs is also receiving an avalanche of new deposits. The bank’s digital consumer deposit platform, which launched years ago as Marcus, reported a record inflow of $ 20 billion in deposits at $ 92 billion.
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