Goldman posts record trading quarter

Goldman Sachs opened earnings season with $17.23 billion in first-quarter revenue, lifted by its biggest equities-trading haul on record. (goldmansachs.com) The bank said on April 13 that net earnings rose to $5.63 billion for the quarter ended March 31, up 19% from a year earlier, while diluted earnings per share climbed to $17.55 from $14.12. Return on common equity reached 19.8%. (goldmansachs.com) The biggest engine was Global Banking and Markets, where revenue rose 19% to $12.74 billion. Equities revenue jumped 27% to $5.33 billion, and investment-banking fees rose 48% to $2.84 billion on stronger merger advice and stock underwriting. (goldmansachs.com) Trading desks make money by financing hedge funds, matching buyers and sellers, and taking positions across stocks, bonds, currencies, and commodities. Goldman’s quarter showed how a volatile market can swell stock-trading revenue even when other parts of the bank lag. (cnbc.com) The weaker spot was fixed income, currencies and commodities, the bond-and-macro trading business known on Wall Street as FICC. Revenue there fell 10% to $4.01 billion, with Goldman citing lower revenue in interest-rate products, mortgages, and credit. (goldmansachs.com) That miss helped push the stock lower even after the earnings beat. Reuters reported Goldman shares fell 1.9% on April 13 as investors focused on the fixed-income shortfall, while CNBC said the division missed StreetAccount estimates by about $910 million. (reuters.com) (cnbc.com) Asset and Wealth Management added $4.08 billion in revenue, up 10% from a year earlier, and Goldman said assets under supervision reached a record $3.65 trillion. The firm also logged its 33rd straight quarter of long-term fee-based net inflows. (goldmansachs.com) Goldman also set aside more money for potential loan losses. Its provision for credit losses rose to $315 million, and CNBC reported that was more than double the StreetAccount estimate of $150.4 million. (goldmansachs.com) (cnbc.com) Chief Executive David Solomon said clients were leaning on the bank during a quarter of heavier market swings and geopolitical strain. The results kept Goldman near the top of Wall Street league tables in announced and completed mergers and acquisitions and in equity-related offerings. (goldmansachs.com) The quarter left Goldman with its second-highest revenue, earnings, and diluted earnings per share on record, but the market reaction showed investors wanted more than a headline beat. On April 13, strong stock trading and dealmaking were not enough to cancel out a bond-trading miss. (goldmansachs.com)