Goldman Sachs sees its profit melt by almost half - Finance

Goldman Sachs sees its profit melt by almost half – Finance

The American investment bank Goldman Sachs saw its net profit halve in the second quarter, weighed down by the drop in operations of the companies it advises. However, its results were better than expected thanks in particular to its brokerage activity.

The Wall Street firm posted a profit of $2.79 billion, down 48%, for a turnover of 11.86 billion, down 23% but above the 10.88 billion forecast by analysts. On a per-share basis and excluding special items, investors’ preferred metric, earnings came in at $7.73, above the expected $7.25. The action took 3.4% in electronic trading prior to the opening of the New York Stock Exchange. Goldman Sachs has especially seen a slowdown in its consulting activity for companies wishing to carry out mergers and acquisitions, go public or raise money (-41%).

Revenues generated by its asset management division also fell sharply (-79%), mainly due to the fall in the valuation of investments on the equity market. On the other hand, the firm’s brokers were particularly active and generated a turnover up 32%, both on the bond, currency and commodity brokerage side (+55%) and on the shares (+11%). The personal services and wealth management business also grew, by 25%.

The investment bank provisioned a little more money in the second quarter (667 million against 561 million in the first quarter) to deal with possible outstanding payments from its customers, mainly due to the growth of its credit card portfolio and of “the impact of broad macroeconomic concerns”. The bank’s operating expenses, which had increased sharply in the second quarter of 2021 with the increase in remuneration, fell by 11% over one year.

The Wall Street firm posted a profit of 2.79 billion dollars, down 48%, for a turnover of 11.86 billion, down 23% but above the 10.88 billion forecast by analysts. On a per-share basis and excluding special items, investors’ preferred metric, earnings came in at $7.73, above the expected $7.25. The action took 3.4% in electronic trading prior to the opening of the New York Stock Exchange. Goldman Sachs especially saw a slowdown in its advisory activity to companies wishing to carry out mergers and acquisitions, go public or raise money (-41%). The revenues generated by its asset management division also strongly declined (-79%), mainly due to the fall in the valuation of investments on the equity market. On the other hand, the firm’s brokers were particularly active and generated a turnover up 32%, both on the bond, currency and commodity brokerage side (+55%) and on the shares (+11%). The personal services and wealth management activity also increased, by 25%. The investment bank provisioned a little more money in the second quarter (667 million against 561 million in the first quarter) to face the potential defaults from its customers, primarily due to the growth of its credit card portfolio and “the impact of broad macroeconomic concerns”. The bank’s operating expenses, which had increased sharply in the second quarter of 2021 with the increase in remuneration, fell by 11% over one year.

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