Goldman Sachs’ profits surged more than 150% in the second quarter, beating analysts’ expectations but down from a strong first quarter that saw the bank post its highest revenue since 2021.
Goldman Sachs Chief Executive David Solomon, who has come under fire for losing talent and a failed retail banking venture, sees the Wall Street giant benefiting from strong debt underwriting and bond trading.
“We are pleased with our strong second quarter performance and overall performance in the first half of the year, with strong year-over-year growth in both our Global Banking and Markets and Asset and Wealth Management segments,” Solomon said in a statement on Monday.
The resilience of the U.S. economy has given corporate executives the confidence to pursue acquisitions, debt sales and public offerings.
“We remain well positioned to benefit from a continued recovery in economic activity,” Solomon said, opening a conference call with analysts by condemning the assassination attempt on former President Donald Trump.
Solomon said capital markets and merger activity is improving but remains below historical averages.
Shares rose nearly 3% to $492.23, just shy of the company’s all-time high of $493.
LSEG said profit rose to $3.04 billion, or $8.62 per share, for the three months ended June 30, about 3 percent above analysts’ average estimate of $8.34 per share.
Goldman is expected to see increased investment-banking fee revenue due to a strong increase in its backlog, Kenneth Leon, research director at CFRA Research, who has a buy recommendation on the stock, said in a note.
The results were slightly better than the previous two quarters, when Goldman reported profits that beat expectations by 35% and 56%, respectively.
Goldman’s investment-banking fees rose 21% to $1.73 billion in the quarter, as fees for advising on mergers and acquisitions rose 7%, while debt and equity underwriting rose 39% and 25%, respectively.
On Friday, JPMorgan reported a 46% increase in investment banking revenue, while Citigroup rose 60%.
Goldman’s second-quarter profits last year were also hit by impairments related to GreenSky, a fintech business it has since sold.
Goldman has refocused on its traditional core businesses of investment banking and trading after a failed push into consumer banking. This year marks the 25th anniversary of Goldman’s initial public offering and the year Mr. Solomon joined the firm.
Investors have backed Goldman’s attempt to refocus on its Wall Street business, sending the Wall Street giant’s shares up 24.4% this year, compared with 11.6% for rivals Morgan Stanley and 20.5% for JPMorgan.
Goldman Sachs manages $2.93 trillion in assets and in May signed a deal to manage UPS Inc.’s $43.4 billion pension fund.
Platform Solutions segment revenue rose 2% to $669 million, beating expectations, driven by growth in credit card balances and deposits.
The bank’s second-quarter provision for credit losses was $282 million, down from $615 million last year.
Goldman Sachs took a $58 million charge to its General Motors credit-card business as it prepares to dissolve its partnership with the company, which it decided to sell off the General Motors credit-card loan portfolio last year.
Sources told Reuters in April that the automaker was in talks with Barclays to replace Goldman.
There are also reports that Apple will end its credit card partnership with Goldman Sachs.
With post wire
