In the first three months of 2014 Goldman Sachs saw profits and turnover fall, but the numbers still exceeded analysts' expectations. The Lloyd Blankfein-led banking giant posted net profits of $2,03 billion ($4,02 per share), down 10% from $2,26 billion in the same period in 2013 ($4,29 per share). Revenue fell 8 percent to $9,328 billion from $10,09 billion last year. Analysts were expecting earnings of $3,45 per share on revenue of $8,7 billion. The return on capital was 10,9%.
“We are generally satisfied with the first quarter performance considering the operating environment. The investment banking and investment management divisions reported solid results,” Blankfein said. Goldman's findings come at a time when banks are grappling with a complex environment in which regulators are asking institutions to scale back riskier assets. Historically Goldman has derived much of its income from calculated risk-taking and brokerage on behalf of clients.
The Bank's fixed income, foreign exchange and commodities (FICC) trading business, a key driver of the Bank's profits for more than a decade, has faced headwinds similar to those that have put pressure on rivals' results. In the first quarter, volumes fell in markets related to bonds and interest rate swaps. As a result, fixed-income trading revenue fell 11% year-over-year to $2,85 billion. Nevertheless, the turnover of the FICC division grew by 65% compared to the fourth quarter. Securities revenue fell 17% to $1,6 billion.
The turnover generated by the consulting activities is good, growing by 41% from the first quarter of 2013 to 682 million dollars. Overall, investment banking revenue rose 13% from last year and 3,6% from the fourth quarter to $1,78 billion. The Bank has tried to reduce expenses, including those for compensation. Compensation and benefits provisions fell 7,6% and 83% from the fourth quarter to $4 billion in the three months.
