TLDR:
- Goldman Sachs reported Q3 earnings of $8.40 per share, beating estimates
- Investment banking fees jumped 20% to $1.87 billion
- Equity trading revenue increased 18% year-over-year
- Total revenue grew 7% to $12.7 billion
- The bank declared a quarterly dividend of $3 per share
Goldman Sachs reported robust third-quarter results on Tuesday, October 15, 2024, exceeding analyst expectations. The financial giant’s performance was primarily driven by strong showings in investment banking and equity trading.
The bank reported earnings of $8.40 per share for the third quarter, surpassing the consensus estimate of $6.89 per share. While this represents a 2.5% year-over-year decline, it still marks a significant beat against projections. Total revenue for the quarter came in at $12.7 billion, a 7% increase from the same period last year and above the anticipated $11.7 billion.
Investment banking emerged as a key driver of growth, with fees jumping 20% to $1.87 billion. This surge was attributed to increased activity in leveraged finance and investment-grade debt underwriting, as well as a rise in equity underwriting revenue.
The bank’s CEO, David Solomon, noted that the performance “demonstrates the strength of our world-class franchise in an improving operating environment.”
Equity trading was another bright spot for Goldman Sachs, with revenue in this segment soaring 18% year-over-year to $3.5 billion. The bank cited strong performance in both derivatives and cash trading as contributing factors to this growth.
However, it wasn’t all positive news. Revenue from fixed income, currency, and commodities trading fell 12% compared to the previous year. Additionally, the bank reported $397 million in provisions for credit losses, a significant increase from $7 million a year ago, primarily due to higher charge-offs in its credit card portfolio.
Goldman Sachs continues to navigate the aftermath of its consumer business venture, taking a one-time hit of $415 million related to the transfer of its GM credit card business to Barclays. The bank is also exiting its credit card partnership with Apple, with JPMorgan reportedly in talks to take over.
On a positive note, the bank’s asset and wealth management unit, which caters to institutions and high-net-worth individuals, saw a 16% increase in revenue compared to the previous year. Assets under supervision reached a record $3.1 trillion in the third quarter.
Looking ahead, Goldman Sachs remains optimistic about M&A activity, noting a “meaningful pickup” in September after a quieter summer period. The bank’s CFO, Denis Coleman, expressed confidence in continued growth in this area.
In light of these results, Goldman Sachs’ board of directors declared a quarterly dividend of $3 per share, payable on December 30 to shareholders of record as of December 2, 2024. The bank also reported $1 billion in stock buybacks during the quarter.
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