Goldman Sachs and Bank of America, the two sides of a mixed picture

Goldman Sachs and Bank of America, two of the large US banks that published balance sheets on Tuesday after the salvo of results for the sector last week, described a mixed outlook in terms of billing and profits.

After the good news for the sector last week, Goldman Sachs, hit by a drop in results from its business banking and brokerage business in the first quarter, reported a cut in revenue and earnings.

Revenues from the activity of advising companies in merger and acquisition operations, going public or capitalization, fell 26% in the quarter compared to the same period of the previous year, due to the prudence exhibited by the firms before launching into this type of movements, details the entity in a statement.

In especially volatile markets, brokerage revenues were also down, both on the bond side and from currency/commodity trading (-17% combined), as well as on the stock market (-7%).

Asset and fortune management activities had good results with a 24% increase in sales.

Thus, its global billing fell 5% to US$ 12.2 billion in the quarter, even below what was expected by analysts. Its net earnings fell 19% to $3.1 billion.

against hand

The result of Goldman Sachs it goes against the grain of the big US banks, which benefited from the rise in interest rates by the Federal Reserve (Fed, central bank).

This is the case of Bank of America, which did follow the general trend, with results higher than expected by the market.

The second bank in the United States by volume of assets registered a 13% increase to US$ 26.3 billion in its income, thanks in part to a 25% increase in its net interest income (the difference between the interest that the bank charges for loans to customers and what it pays to savers).

Its net profits thus amounted to US$7.7 billion, 16% above the first quarter of 2022.

Bank of America closed up 0.63% on Wall Street, while Goldman Sachs lost 1.70%.

Last Friday, four of the largest banks in the United States presented healthy results for the first quarter of the year, in particular due to the increase in interest rates, without being too affected by the recent financial turmoil.

Among the main ones are JPMorgan, Citigroup, Wells Fargo and PNC, which benefited precisely from the sharp rise in interest rates that the Fed has been promoting for a year to fight inflation.

The billing of JPMorgan, the largest US bank by asset volume, rose 25% to a record in the first quarter. And that of Citigroup, the third bank in the country, increased 12%.

JPMorgan thus registered an increase in its profits of 52% to US$ 12.6 billion in the period considered in comparison with the same quarter of 2022. Wells Fargo obtained 34% more profits to US$ 4.7 billion, Citigroup 7% more to 4.6 billion , and PNC was up 18% with 1.6 billion.