Traditional banks outshine Goldman in 1Q fixed-income trading

Apr 19, 2017, 01:32
Traditional banks outshine Goldman in 1Q fixed-income trading

"This isn't a moment of super concern for us", Harvey Schwartz, the outgoing CFO, added on the call. Bank of America also reported earnings Tuesday, beating or meeting Wall Street expectations on nearly every single metric.

Credit Suisse analyst Christian Bolu said Goldman investors were showing some "nervousness" about the strength of the business, and UBS's Brennan Hawken chastised the performance, saying that topping the prior year should have been "kind of easy". Atlantic Securities downgraded shares of Goldman Sachs Group from an "overweight" rating to a "neutral" rating and boosted their target price for the stock from $205.00 to $240.00 in a report on Wednesday, December 21st.

Volatility in the currency and commodities markets were at two-year lows, he said, while realized volatility in the equity market was also at a historic low.

Net revenues from bond, currency and commodities trading was little changed from the same period a year ago at $1.69 billion.

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Yet Goldman failed to get the same trading bump as rivals J.P. Morgan and Citigroup last week.

Goldman's profits for the quarter were $2.26 billion, or $5.15 a share. But the results were well short of analyst forecasts of US$5.31 per share, on average, according to Thomson Reuters I/B/E/S. However that part of Goldman's business tends to swing up and down as the bank sells investments or puts new valuations on those investments.

Bank of America said today that its trading revenue increased by almost 23 per cent in the first quarter to $4 billion, boosted by a 29 per cent jump in fees from fixed income trading. Net income was down, ending the quarter at $765 million equal to $1.27 per share, compared to over $2.17 billion equal to $4.38 per share, after the company agreed to settle a probe by USA authorities into the handling by the bank of securities that were mortgage-back, lowered earnings by more than $1.54 billion. Acadian Asset Management LLC now owns 20,865 shares of the investment management company's stock valued at $3,365,000 after buying an additional 18,752 shares during the last quarter. Non-interest income for the quarter rose 37.67 percent over the past year period to $7,510 million.

Pressed by analysts about Goldman Sachs' client mix, Chavez said some rivals had a bigger corporate client base, as they have larger lending books and bigger financing units.