Dealmaking used to be Goldman Sachs’ bread and butter, but eventually it could just be the crusts. The Wall Street firm reported a collapse in deal fees in the second quarter, just like rivals did. Sprightly trading revenue helped cushion the blow, but still, under all that noise, Goldman Chief Executive David Solomon’s pivot towards more predictable fee-and-interest income has received a helpful pre-recession shove.
managed. When chief executives get cold feet, there’s nowhere for consiglieri and underwriters to hide.
In trading too, Goldman surpassed its peers. Fixed income and equities revenue grew by 32%, almost triple the rate of Bank of America, which typically keeps its traders on a shorter leash. Goldman also beat Morgan Stanley, since it was fixed income that took flight, and James Gorman’s firm leans more heavily on equities. In short, while Solomon is as cautious as his rivals about a potential recession, this period of uncertainty isn’t doing Goldman any harm.
Earnings per share of $7.73 beat analyst estimates of $6.95, according to Refinitiv, on a fully diluted bases. That was roughly half the figure from a year earlier. Goldman has been increasing its lending and consumer banking businesses, including its Marcus savings product. Revenue from the consumer and wealth division grew 25% compared to the same quarter last year, but charges for future bad debts increased to $394 million, from $66 million in the second quarter of 2021.Editing by Lauren Silva Laughlin and Sharon Lam
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