Despite the slowdown in transactions, Goldman Sachs’ revenue is still growing
Goldman Sachs’ revenue increased in the second quarter as its asset management unit exceeded expectations, making up for the slowdown in the trading boom that boosted Wall Street bank earnings in the first few months of the Covid-19 pandemic.
According to consensus data compiled by Bloomberg, Goldman Sachs’ total revenue was US$15.4 billion, a year-on-year increase of 16%, higher than analysts’ forecast of US$12.4 billion.
Earnings per share were US$15.02, higher than US$0.53 in the same period last year, when Goldman Sachs provided US$1.59 billion for potential loan losses caused by the Covid-19 crisis. Analysts had previously expected earnings per share for the quarter to be $10.14.
Helping to drive profitable growth is Goldman Sachs’ asset management business, which provides funding for private equity investments. The department reported revenue of US$5.1 billion, a year-on-year increase of 144%, which was much higher than the expected US$2.8 billion.
The increase in investment banking fees is due to Surge In M&A activities. The revenue of its investment banking division was US$3.6 billion, an increase of 36% year-on-year, which was higher than analysts’ expectations of US$3.1 billion.
However, as the launch of the vaccine boosted investors’ confidence in the US economy and curbed market volatility, the revenue of Goldman Sachs’ market operations fell 32% year-on-year to US$4.9 billion in the second quarter. Analysts had previously expected revenue of 5 billion U.S. dollars.