Goldman Sachs CEO says trading revenue is heading for a 10% slide in 3Q
Adds CEO comments on investment banking, economy in paragraphs 3-11.
By Saeed Azhar
TORONTO, Sept 9 (Reuters) -Goldman Sachs' GS.N trading revenue will probably slip 10% in the third quarter because of sluggish conditions last month, CEO David Solomon said on Monday.
Given "a more challenging macro environment, particularly in the month of August, that business is trending down close to 10%," Solomon told investors at a financial conference in New York.
The slide will follow a very strong quarter for trading in the third quarter of 2023, when equities revenue jumped 8%.
The Wall Street giant'sprofit more than doubled in the second quarter as dealmaking rebounded, with debt underwriting and fixed-income trading performing particularly well.
Investment banking continues to improve, even though activity from financial sponsors has not rebounded as much as expected, said Solomon, who was hopeful that private equity-led deals will bounce back at the end of this year and in 2025.
He declined to specify a forecast for investment banking revenue.
Citigroup's C.N Chief Financial Officer Mark Mason told the same conference earlier Monday that investment banking fees are expected to jump 20% in the third quarter from a year earlier.
Goldman Sachs continues to narrow its focus on the consumer business, Solomon said. He cited Goldman's sale of loans to small and medium sized businesses, and its plans to exit a credit card partnership with General Motors as examples of the bank stepping back from retail businesses, an effort that began in late 2022.
"The combination of those things this quarter will likely have an approximately $400 million pre-tax impact, largely showing up in revenues," Solomon said.
General Motors is in talks with Barclays for a credit card partnership deal that will replace Goldman, a source familiar with the matter told Reuters in April.
Meanwhile, the U.S. economy has been in "reasonable shape," suggesting credit conditions will remain relatively steady, he said.
Reporting by Saeed Azhar; editing by Lananh Nguyen
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
