Goldman Sachs Bond Trading Revenue Plunges 40 %

Hey monkeys,

Recently, Goldman Sachs reported a 40% drop in bond trading revenue, reflecting the overall weakness in trading activity in big U.S. banks.

The slump was far worse than JPMorgan Chase & Co's 19 percent fall and Citigroup Inc's 6 percent drop, leading to Goldman's worst fixed-income results since the fourth quarter of 2015.

Goldman's revenue from trading fixed income, currency and commodities fell to $1.16 billion from $1.93 billion. Trading surged a year-ago around the Brexit vote.
The slump was far worse than JPMorgan Chase & Co's 19 percent fall and Citigroup Inc's 6 percent drop, leading to Goldman's worst fixed-income results since the fourth quarter of 2015.

Goldman's revenue from trading fixed income, currency and commodities fell to $1.16 billion from $1.93 billion. Trading surged a year-ago around the Brexit vote.

Goldman Sachs has long been reliant on bond trading revenue than its peers. Now regulators have hurt Goldman Sachs

Earnings per share, however, rose to $3.95 as number of shares outstanding decreased nearly 6 percent. It topped analysts' average estimate of $3.39 per share, according to Thomson Reuters I/B/E/S.

Total revenue, including net interest income, fell 0.6 percent to $7.89 billion.

Goldman's operating expenses fell about 2 percent to $5.38 billion.

The lender's return on equity was 8.7 percent. Analysts typically like to see a bank produce returns of at least 10 percent to meet its cost of capital.

Goldman has been working to cut its reliance on trading and shift to more stable businesses like investment management. That division generated revenue of $1.53 billion, up 13 percent from the year-ago quarter.

The bank has also pushed into consumer lending, launching an online platform called Marcus in 2016.

Shares of Goldman, a Dow component, fell 0.6 percent in premarket trading. The stock is the worst performing among the six large U.S. banks. Up to Monday's close, it had lost 4.3 percent in value this year, significantly underperforming the broader S&P 500 Financial Index, which has gained 6.7 percent.

What do you guys think? How are you guys expecting Morgan Stanley to do? I'm assuming it won't be the best news for Morgan Stanley but perhaps they won't suffer as much as Goldman did.

Comments (8)

Jul 18, 2017

GS have never been good at trading. Their prop desk sucked. Only reason they've historically done well in commodities is through acquisitions and "leading" markets.
@DickFuld Should replace LB as CEO :)

Best Response
Jul 18, 2017
HazelJ:

GS have never been good at trading. Their prop desk sucked. Only reason they've historically done well in commodities is through acquisitions and "leading" markets.
@DickFuld Should replace LB as CEO :)

The first sensible idea I've heard on WSO in years. Too bad I would never take that job. GS is my sworn enemy.

    • 7
Jul 21, 2017

GS or George W Bush?

RIP LEHMAN
RIP MONACOMONKEY
RIP THEACCOUNTING MAJOR

Jul 21, 2017

interesting, why do you think so?

Jul 20, 2017

Morgan Stanley already reported brah - 4% decrease in trading revenue.

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Jul 20, 2017

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Jul 20, 2017

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    • 1
Jul 20, 2017
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