Goldman Sachs Sees Resurgence In Debt Underwriting And Deal Activity, Q1 Profit Jumps 28%

Zinger Key Points
  • Goldman Sachs' Q1 FY2024 investment banking fees increased 32% to $2.08 billion.
  • Provision for credit losses was $318 million for the first quarter of 2024, compared with a net benefit of $171 million a year ago.

On Monday, Goldman Sachs Group Inc. GS reported revenue of $14.21 billion for the first quarter of 2024, beating the consensus of $12.92 billion. Sales increased 16% year over year, reflecting higher net revenues across all segments.

Global Banking & Markets were $9.73 billion, up 15% Y/Y, boosted by a 32% increase in investment banking fees to $2.08 billion, primarily driven by an increase in completed mergers and acquisitions transactions and initial public and secondary offerings.

Like JPMorgan Chase & Co JPM and Citigroup Inc C, Goldman Sachs reported strong trading and investment banking results for the first quarter, benefiting from improved market conditions. 

Unlike its more diversified competitors, CNBC noted that Goldman primarily relies on Wall Street activities for revenue, which can result in significant returns during market booms and underperformance during downturns. 

Having shifted focus away from retail banking, Goldman now prioritizes growth in its asset and wealth management division.

Asset & Wealth Management was $3.79 billion for the first quarter of 2024, 18% higher than the first quarter of 2023.

Net revenues in Fixed Income, Currency, and Commodities (FICC) were $4.32 billion, 10% higher than the first quarter of 2023, primarily reflecting significantly higher net revenues in FICC financing, driven by mortgages and structured lending.

The U.S. financial services giant reported EPS of $11.58, beating the consensus of $8.60.

Goldman Sachs reported a 28% increase in profit to $4.13 billion.

“Our first quarter results reflect the strength of our world-class and interconnected franchises and the earnings power of Goldman Sachs. We continue to execute on our strategy, focusing on our core strengths to serve our clients and deliver for our shareholders,” said David Solomon, Chairman and CEO.

Provision for credit losses was $318 million for the first quarter of 2024, compared with a net benefit of $171 million a year ago, reflecting net provisions related to both the credit card portfolio and wholesale loans.

Price Action: GS shares are up 4.04% at $405.24 during the premarket session on the last check Monday.

Photo via Shutterstock

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