Goldman Sachs’ third-quarter results beat top and bottom-line analyst expectations. 📈
The company’s adjusted earnings per share of $8.25 topped the $7.69 expected. And revenues of $11.98 billion beat the $11.41 billion expected. On a YoY basis, profits fell 43%, and revenues dipped 12%, but still beat estimates.
Revenue from fixed-income trading was a bright spot, rising 41% YoY, while equities trading fell 14%. Strong results in its trading division offset investment banking, where revenues fell 57% amid the weak deal environment. Asset Management revenue fell 20% but still beat expectations. And lastly, consumer & wealth management revenue rose by 18%.
The themes from its report are essentially in line with what we heard from its competitors on Friday and Monday. 👂
Its venture into the consumer banking business is getting the most attention, mainly because it continues to lose money. Although it spent a lot in marketing dollars and paired up with companies like Apple, it hasn’t quite seen the success it expected.
The company intends to shake things up, reorganizing the bank’s four main divisions into three. This will split the consumer operations business and combine it with two of the remaining three: Asset & Wealth Management, Global Banking & Markets, and Platform Solutions.
In a rare admission of guilt, the company admitted that its consumer banking business strategy was flawed. Instead of trying to acquire customers on a mass scale, it will now focus on exiting Marcus customers and potential customers through its existing workplace and personal wealth channels.
The strategic shift should give it a solid foundation and allow it to compete from a position of strength rather than constantly chasing after external customers like every other financial institution.
Investors seem happy with the results and strategy shift, as $GS shares were up over 2% today. 👍
