Lights and shadows for Goldman Sachs, earnings and revenues above expectations for Bank of America. The long awaited ones have been published quarterly reports of US banks which have pushed upwards since the early hours of this morning the securities of European banking institutions and with them the Stock Exchanges of the Old Continent. In both cases, in fact, the numbers show that the big names in the US banking sector have been able to withstand the blows of the monetary tightening undertaken by the Fed to deal with inflation, but also those of the crisis triggered by the failure of the Silicon Valley Bank. However, the declining profits penalize the Goldman Sachs stock, which drops 3,5% just a few minutes after the opening of Wall Street. On the other hand, Bofa shares gain 1%.
Goldman Sachs: earnings down but above expectations. Ad Solomon: 'Demonstrated resilience'
That of Goldman Sachs can be defined as a first quarter between lights and shadows. In the first three months of 2023, the New York banking giant recorded a Net income down 18% to $3,23 billion, $8,79 per share, compared with $3,83 billion, $10,76 per share, in the same period last year. However, the result beat the expectations of analysts who expected even lower profits to 8,1 dollars per share. Down too i revenues, dropped by 5% to 12,22 billion against expectations of 12,76 billion.
Il annualized return on capital stood at 11,6%, the Red at 12,6% and the book value it rose 2,3% to $310,48 per share. The assets under supervision they grew by $125 billion to $2.670 trillion, a record high. “The events of the first quarter were a real-life stress test, demonstrating the resilience of Goldman Sachs and the nation's largest financial institutions,” he said. Chief Executive Officer David Solomon, putting in a “solid performance”. The CEO also underlined that the company "operates in a position of strength and remains focused on executing its strategy to further grow the Global Banking & Markets and wealth and asset management businesses".
Through a note, Goldman Sachs highlighted that the decline in turnover compared to the first quarter of 2022 (+15% on the fourth quarter of 2022) reflects the decrease in net revenues of theGlobal Banking & Markets area (-16% to $8,44 billion, but +30% compared to the fourth quarter), partially offset by the significant increase in net revenues of Asset & Wealth Management and Platform Solutions.
In more detail, looking at the area that follows the global markets, there is a reduction of 26% to 1,58 billion of investment banking fees, the decline of 17% to 3,93 billion of the revenues of theFicc area (Fixed Income, Commodities and Currencies) and a 7% decline in revenues from thestock. The division of wealth and asset management instead saw revenues increase by 24% to 3,22 billion (-10% compared to the fourth quarter), while revenues from thePlatform Solutions area they jumped 110% to 564 million.
Finally, in the first quarter of the current year, the operating expenses rose by 9% to 8,4 billion, with a efficiency ratio rose from 59,7% to 68,7%.
Quarter above forecasts for Bank of America
Profits and revenues not only up, but also above expectations for Bank of America which, as underlined by CEO Brian Moynihan in the first quarter of 2023, "further strengthened the balance sheet and maintained solid liquidity".
In detail, in the first three months of the year, Bofa recorded to evaluate of $8,2 billion, 94 cents a share, up 15% from $7,1 billion, 85 cents a share, for the same period last year. THE revenues they grew by 13% to 26,3 billion. Analysts were expecting profits of 82 cents per share on average revenue of $25,14 billion.
"In an economic environment with a modest slowdown in GDP growth, our results demonstrate that the company's decade-long commitment to responsible growth has helped provide stability in a changing economic environment," he said. CEO Moynihan.
In terms of assets, the relationship in the first quarter Cet1 it came in at 11,4%, 14 basis points higher than the previous quarter, while the book value it rose 6% to $31,58. The provisions against potential credit losses rose from $901 million to $931 million, an increase in net reserves for 124 million (in the same period last year there had been a reduction in reserves of 362 million).
