Goldman Sachs rakes in 19% profit in the first quarter
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The news: Wall Street giant Goldman Sachs reported a 19% increase in net earnings during the first quarter, as its banking and markets divisions delivered record performances.
The numbers: Goldman’s net earnings hit USD5.63 billion ($8 billion), or USD17.55 per share, beating expectations and notching the bank’s second-best quarter to date, coming second to the first-quarter rebound following Covid-19.
The bank reported net revenue of USD17.23 billion, a 14% increase on the USD15.06 billion reached in the same period last year.
Goldman’s banking and markets division hit an all-time record of USD12.74 billion in revenue, with investment banking fees up 48% at USD2.84 billion and revenue from its markets division climbing 9% to USD9.34 billion.
The context: Despite the strong performance, the bank’s fixed-income, currency and commodities traders missed expectations, reporting a 10% drop in revenue to USD4 billion, instead of a 10% increase which had been forecast. Goldman said the weak performance was due to significantly lower net revenue in interest rate products and mortgages and lower net revenue in credit products.
With one of Wall Street’s largest markets divisions, Goldman was well placed to capitalise on volatility brought about by the US war in Iran, in addition to concerns about the artificial intelligence and private credit which rattled global markets during the first quarter.
What they said: David Solomon, chairman and CEO of Goldman Sachs, said in a statement on the earnings: “Goldman Sachs delivered very strong performance for our shareholders this quarter, even as market conditions became more volatile. Our clients continue to depend on us for high quality execution and insights amid the broader uncertainty, and we remain confident in how we’ve positioned our businesses. The geopolitical landscape remains very complex — so disciplined risk management must remain core to how we operate.”
The sources: Goldman Sachs earnings results, Goldman Sachs press release
