David Solomon, CEO, Goldman Sachs, speaking at the World Economic Forum in Davos, Switzerland on January 23, 2020.
Adam Galacia | Cnbc
Goldman Sachs on Tuesday beat analysts’ expectations for fourth-quarter profit and revenue on strong performance from the firm’s equity traders and investment bankers.
The bank earned $ 12.08 per share, crushing at $ 7.47 per share, according to analysts polled by Refinitive. Revenue of $ 11.74 billion exceeded the estimate by approximately $ 1.75 billion.
Expectations were high for Goldman CEO David Solomon. Last week, JPMorgan Chase posted record fourth-quarter trading and advisory results, beating the bank’s profit projections.
Of the six largest US banks, Goldman derives the largest share of its revenue from Wall Street activities including trading and investment banking. Over the past few years that has been a hindrance for the firm as retail banking has driven industry record profits.
Now, for the last quarter of a year married by the coronavirus epidemic, Goldman’s model may prove to be an advantage. Firms with large consumer lending operations were forced to set aside tens of billions of dollars in provisions for sourcing loans.
But the wider open market, thanks to unprecedented actions in the first year of the Federal Reserve, is expected to help Wall Street have the best year for trade since the financial crisis. Meanwhile, investment bankers are benefiting from record high IPO demand and debt issuance.
Goldman’s shares climbed 11% in 2020, seeing the KBW Bank index decline by 4.3%.
These numbers are as follows:
According to refinitiv, earnings: $ 12.08 per share, versus $ 7.47 per share expected.
Revenue: $ 11.74 billion, vs. an estimate of $ 9.9 billion.
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