The next big bank to report earnings was Goldman Sachs, who had a lot to show. So far, JPMorgan, Morgan Stanley, Wells Fargo, Citigroup, and Bank of America have seen some negativity in their earnings, and Goldman gave us some more pieces to add to the puzzle.
Second quarter earnings fell by 47 percent, with the investment banking side seeing a decline of 41 percent this quarter. These statistics generally line up with the rest of the big banks, and this is because of the recent volatility in the markets that have resulted in a 20 percent drop from highs. Profit has declined by double digits, and overall revenue beat analyst expectations while falling by 23 percent. One positive was trading revenue, which was seen across the banks too. Goldman saw a 32 percent increase in trading revenue as investors diversified their assets through a variety of asset classes to cope with the volatility, which resulted in more profitable trades. Lastly, Goldman said in their earnings call that they will slow down their hiring process after increasing their employee number from last year, which has also been a trend. The big banks were mostly disappointing with their earnings, but Goldman did slightly better than the others, which caused a rise in their share price. This is another statistic to the mixed review of our economy at its current state and it’ll be important to see how the banks change their expectations for the next quarter.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.