The bottom line is that the shareholders accounted for a surplus of almost three billion US dollars (3.1 billion euros) and thus 44 percent less than in the exceptionally good prior-year period. While other banks increased their income, sometimes sharply, thanks to the rise in interest rates, Goldman Sachs’ net income fell by twelve percent to almost twelve billion dollars. However, analysts had expected an even sharper decline on average.
In the third quarter, a sharp increase in net interest income was unable to offset declines in the Bank’s other business areas. The strongest signs of the slowdown were in investment banking, where earnings were $1.6 billion, 57 percent lower than in the same period last year. In addition, Goldman Sachs put more money aside for impending loan defaults. At $515 million, loan loss provisions were almost three times higher than a year earlier, although not as high as in the second quarter.
Goldman Sachs continues series of good US bank figures
The quarterly reports from US banks, which were mostly well received by investors, continued on Tuesday with the figures from Goldman Sachs. As one of the strongest values in the Dow Jones 30 Industrial on the NYSE, the investment bank’s titles rose by 3.22 percent to $ 316.59. At the top it was even 5.8 percent. The industry giant’s net earnings collapsed, but not as much as experts expected.
The analysis house RBC praised a strong quarterly result from the Wall Street icon. According to analyst Gerard Cassidy, earnings per share of $8.25 were well above his and consensus estimates.
Evercore ISI analyst Glenn Schorr spoke of a quarter that was definitely not one of the big ones, but nevertheless praised Goldman Sachs’ trading profit and net interest income, complemented by a lower tax rate. Other areas, such as investment banking and wealth management, have recently underperformed in line with financial markets, he wrote.
Looking at the competitors only Morgan Stanley could not convince. JPMorgan ChaseCo, Citigroup and Wells FargoCo, on the other hand, cheered investors on Friday as their numbers surprised on the upside. On Monday, Bank of America followed with good news.
It is therefore not surprising that the financial sector has recently led the recovery of the US stock exchanges in the sector valuation. Within a week, the sector index, at 6.8 percent, has made by far the most significant gains in the sector comparison of the market-wide S&P index.
NEW YORK (dpa-AFX)
Leverage must be between 2 and 20
No data
More news about Goldman Sachs
Image Credits: Chris Hondros/Getty Images, Gil C / Shutterstock.com