Revenues at Goldman Sachs rose in the second quarter as a strong performance in its wealth management unit offset by a slowdown in the business bond that boosted Wall Street bank’s earnings in the early months of the Covid pandemic -19.
Goldman’s total revenues were $ 15.4 billion, up 16 percent from a year ago and ahead of analysts ’forecasts of $ 12.4 billion, according to consensus data compiled by Bloomberg.
Earnings per share were $ 15.02, up from $ 0.53 in the same quarter last year, when Goldman set aside $ 1.59 billion in provisions for potential loan losses arising from the crisis. coronavirus. Analysts have forecast earnings of $ 10.14 per share for this quarter.
Helping drive the success of the earnings was Goldman’s asset management business, which hosts its own fund for private equity investments. The division reported revenue of $ 5.1 billion, up 144 percent from a year ago and well ahead of forecasts of $ 2.8 billion. The bank said it has generated record net quarterly revenues from its private equity investments.
The fees earned in investment banking have increased, thanks to a surge in mergers and acquisitions. Revenues in its investment banking unit were $ 3.6 billion, up 36 percent year-over-year and ahead of analysts ’estimates of $ 3.1 billion.
However, revenues in Goldman’s market activity fell 32 percent year-over-year to $ 4.9 billion in the second quarter as the implementation of the vaccines boosted investor confidence and slowed. market volatility. Analysts have forecast revenues of $ 5 billion.
Market revenues grew earlier in the pandemic as investors repositioned their portfolios to keep pace with price fluctuations caused by uncertainty surrounding the economic impact and stimulus of the virus from the Reserve. Federal Government of the United States.
It has been a boon for Goldman, which manages transactions for clients who trade stocks, fixed income, currencies and commodities.
David Solomon, CEO of Goldman, made a cautious note on the bank’s outlook Tuesday, saying: “While the economic recovery is underway, our customers and communities are still facing challenges in overcoming the pandemic.”
Eighteen months ago Goldman outlined plans in its first day of investing to focus on consumer and transactional banking so that it would become less dependent on its commercial and investment banking.
Revenues in the consumer and wealth management unit, which includes its online bank Marcus and its Apple credit card, rose 28 percent to $ 1.7 billion, in line with forecasts. of analysts. The division reported earnings of $ 363 million, up 41 percent.
The annual return on equity for the fourth quarter was 23.7 percent, compared to the 14 percent medium-term Goldman target set in 2020.
The bank said it had approved a 60 percent increase in its quarterly dividend to $ 2 per common share, starting in the third quarter. It also regained $ 1 billion of stock in the second quarter.
“The only‘ disappointment ’in the quarter was that there was only $ 1bn of share repurchases against our estimate of $ 3.2bn,” Oppenheimer analysts wrote in a note.
Shares in the bank increased by about 0.2 percent in pre-market trading.