Goldman Sachs beat estimates for fourth-quarter revenue on Tuesday as its fairness merchants capitalized on a market restoration and income from asset and wealth administration rose, offsetting weaker funding banking.
Inventory markets have rallied as economists and buyers develop extra assured the US will keep away from a recession. Market individuals are additionally debating when the Federal Reserve will lower rates of interest, which may act as one other catalyst for exercise.
“This was a yr of execution for Goldman Sachs,” CEO David Solomon stated in an announcement. “With every little thing we achieved in 2023 coupled with our clear and simplified technique, we now have a a lot stronger platform for 2024.”
The financial institution’s shares climbed 1.3% in buying and selling earlier than the bell. They have been up 12.3% final yr, in contrast with positive aspects of 27% for JPMorgan Chase and 10% for Morgan Stanley.
Goldman’s fairness buying and selling income jumped 26% within the fourth quarter, whereas its income from asset and wealth administration rose 23% to $4.39 billion.
The unit additionally booked a acquire of $349 million from a deal to promote a part of its wealth enterprise to an impartial wealth supervisor.
Funding banking charges fell 12% to $1.65 billion, as a decline in mergers and acquisitions (M&A) offset positive aspects from debt and inventory gross sales.
Income from mounted revenue, currencies and commodities (FICC) buying and selling fell 24% as weak spot in rate of interest merchandise and currencies dragged down positive aspects from mortgage merchandise.
The financial institution’s revenue was $2.01 billion, or $5.48 per share, for the newest quarter, in contrast with $1.33 billion, or $3.32 per share, a yr earlier.
Analysts on common anticipated a revenue of $3.51 per share, based on LSEG knowledge.
Headcount
Goldman had a headcount of 45,300 on the finish of December, 1% lower than within the third quarter and almost 7% decrease than within the year-earlier interval.
The financial institution laid off 1000’s of staff in 2023, together with cuts to its workforce in January that have been the biggest because the 2008 monetary disaster.
Goldman is among the many banking giants that may pay a particular evaluation price to refill a authorities deposit insurance coverage fund (DIF) that was drained of $16 billion by the collapse of two regional banks final yr.
It acknowledged a $529 million expense tied to the price within the fourth quarter.
Platform options increase
Goldman’s platform options unit, which homes a few of its client operations, reported a 12% leap in income to $577 million.
The leap was pushed by larger common bank card balances, which cushioned the hit from markdowns associated to the portfolio of GreenSky loans held on the market.
Goldman has been slimming down its ill-fated client enterprise, after a reorganization in 2022 that noticed it merge its conventional mainstays of buying and selling and funding banking.
GreenSky, which facilitates dwelling enchancment loans for customers, was bought to a consortium of funding companies led by Sixth Road Companions.
4 years after introducing a bank card with Apple, the Wall Road big additionally faces a expensive exit from a partnership that’s seen by different lenders as too dangerous and unprofitable.
Goldman may have to cut back the worth of its stake to tempt bidders to take its place within the partnership, Reuters reported final month.
Goldman’s provisions for credit score losses fell to $577 million within the quarter from $972 million a yr earlier.
In the meantime, it diminished reserves of $160 million by transferring its Normal Motors bank card portfolio to a class of belongings generally known as held on the market. Normal Motors is on the lookout for a brand new accomplice to interchange Goldman Sachs.
Inventory markets have rallied as economists and buyers develop extra assured the US will keep away from a recession. Market individuals are additionally debating when the Federal Reserve will lower rates of interest, which may act as one other catalyst for exercise.
“This was a yr of execution for Goldman Sachs,” CEO David Solomon stated in an announcement. “With every little thing we achieved in 2023 coupled with our clear and simplified technique, we now have a a lot stronger platform for 2024.”
The financial institution’s shares climbed 1.3% in buying and selling earlier than the bell. They have been up 12.3% final yr, in contrast with positive aspects of 27% for JPMorgan Chase and 10% for Morgan Stanley.
Goldman’s fairness buying and selling income jumped 26% within the fourth quarter, whereas its income from asset and wealth administration rose 23% to $4.39 billion.
The unit additionally booked a acquire of $349 million from a deal to promote a part of its wealth enterprise to an impartial wealth supervisor.
Funding banking charges fell 12% to $1.65 billion, as a decline in mergers and acquisitions (M&A) offset positive aspects from debt and inventory gross sales.
Income from mounted revenue, currencies and commodities (FICC) buying and selling fell 24% as weak spot in rate of interest merchandise and currencies dragged down positive aspects from mortgage merchandise.
The financial institution’s revenue was $2.01 billion, or $5.48 per share, for the newest quarter, in contrast with $1.33 billion, or $3.32 per share, a yr earlier.
Analysts on common anticipated a revenue of $3.51 per share, based on LSEG knowledge.
Headcount
Goldman had a headcount of 45,300 on the finish of December, 1% lower than within the third quarter and almost 7% decrease than within the year-earlier interval.
The financial institution laid off 1000’s of staff in 2023, together with cuts to its workforce in January that have been the biggest because the 2008 monetary disaster.
Goldman is among the many banking giants that may pay a particular evaluation price to refill a authorities deposit insurance coverage fund (DIF) that was drained of $16 billion by the collapse of two regional banks final yr.
It acknowledged a $529 million expense tied to the price within the fourth quarter.
Platform options increase
Goldman’s platform options unit, which homes a few of its client operations, reported a 12% leap in income to $577 million.
The leap was pushed by larger common bank card balances, which cushioned the hit from markdowns associated to the portfolio of GreenSky loans held on the market.
Goldman has been slimming down its ill-fated client enterprise, after a reorganization in 2022 that noticed it merge its conventional mainstays of buying and selling and funding banking.
GreenSky, which facilitates dwelling enchancment loans for customers, was bought to a consortium of funding companies led by Sixth Road Companions.
4 years after introducing a bank card with Apple, the Wall Road big additionally faces a expensive exit from a partnership that’s seen by different lenders as too dangerous and unprofitable.
Goldman may have to cut back the worth of its stake to tempt bidders to take its place within the partnership, Reuters reported final month.
Goldman’s provisions for credit score losses fell to $577 million within the quarter from $972 million a yr earlier.
In the meantime, it diminished reserves of $160 million by transferring its Normal Motors bank card portfolio to a class of belongings generally known as held on the market. Normal Motors is on the lookout for a brand new accomplice to interchange Goldman Sachs.
