International Business: Goldman's trading returns to former glory

Marco Green
October 16, 2020

Goldman Sachs (NYSE:GS) posted third-quarter results that crushed analysts' profit estimates on stronger-than-expected results in bond trading and asset management. With its 4,300 branches across the country, Bank of America is often seen as a bellwether for the US consumer.

Bank executives have warned that the United States recovery could falter if Washington fails to enact additional stimulus following the expiration of key programs to support unemployed workers and embattled industries.

The company earned $3.6 billion, or $9.68 per share, in the three months ended September 30.

Revenue from trading rose 3.6 per cent to US$3.34 billion, falling short of the US$3.5 billion that analysts had forecast.

The bank set aside $278 million to cover loans that go bad, bringing its year-to-date total credit provisions to $2.8 billion.

The investment bank's trading units are tracing a similar trajectory.

Whereas all these banks made billions on buying and selling a frothy market within the third quarter, they had been additionally dragged down by shopper banking teams which might be weathering robust instances because the coronavirus disaster enters its eighth month.

Goldman's revenue rose in all four divisions compared with the year-ago period. The stock was down 29 per cent this year through Tuesday.

Chief Executive Officer David Solomon just marked his second year atop Goldman Sachs, but he's still putting his imprint on the firm. By comparison, traditional rivals JPMorgan, Bank of America Corp and Citigroup Inc have set aside anywhere from US$10 billion-20 billion this year. Net interest income fell as a result of lower rates, while trading revenue grew 4% compared with a year earlier.

Goldman's overall profit almost doubled $3.5 billion from $1.8 billion a year ago. But the bank released $179 million in consumer banking that had been previously reserved due to an improving economy.

Analysts had expected a profit of US$5.57 per share, on average, the IBES estimate from Refinitiv showed.

Solomon and his workforce had been additionally helped alongside by a powerful efficiency from the financial institution's wealth administration division, which generated $1.1 billion in income, a 13-percent enchancment from 2019.

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