Goldman Sachs (NYSE:GS) has reported Q2 2023 earnings, and it’s a bit of a mixed bag. Goldman surpassed expectations for top-line revenue generating $10.9 billion on a predicted $10.61 billion. Net revenue disappointed as Goldman generated an earnings per share of $3.08, with analysts anticipating an EPS of $3.16.
Headlines were a bit bellicose, trumpeting a 58% profit decline versus the same quarter year prior. But 2023 is way different than 2023 as Goldman seeks to navigate the choppy waters.
In the earnings release, David Solomon, Chairman and CEO of Goldman, stated:
“This quarter reflects [the] continued strategic execution of our goals. Global Banking & Markets delivered solid returns in an environment with cyclically low activity levels and we remained #1 in completed M&A – a testament to our world-class client franchise. Asset & Wealth Management produced record AUS, record Management, and other fees and record net revenues in Private banking and lending. I remain fully confident that continued execution will enable us to deliver on our through-the-cycle return targets and create significant value for shareholders.”
Goldman said that Q2 net revenues were lower year over year in Global Banking & Markets and Asset & Wealth Management. Revenue was higher in Platform Solutions – this includes its card services like it provides to Apple.
Platform Solutions generated $659 million in revenue – 17% higher than Q1 2023 and 92% higher than Q2 2022. At the same time, Platform Solutions generated a net loss of $667 million. The increase in consumer platforms’ net revenues primarily reflected significantly higher average credit card balances and higher average point-of-sale loan balances.
Goldman continues to move in reverse regarding consumer services, IE Marcus. The company said that private banking and lending net revenues were a record, reflecting the impact of higher deposit spreads and balances, as well as a gain of approximately $100 million related to the sale of substantially all of the remaining Marcus loans portfolio.
Global Banking & Markets generated quarterly net revenues of $7.19 billion. Net revenues in FICC (trading and sales) were $2.71 billion, 26% lower than in Q2 of 2022.
Asset & Wealth Management generated quarterly net revenues of $3.05 billion.
Assets under supervision increased $42 billion during the quarter to a record $2.71 trillion.
Q2 provision for credit loss, including credit cards and point-of-sale loans, stood at $615 million.
Expenses were higher by 12 % versus Q2 2022 at $8.54 billion. Goldman said that headcount has been reduced by 2% when compared to Q1 2023.
Goldman announced a $2.75 dividend per share, a slight increase compared to the prior quarter.
Shares are hovering in pre-market trading.
Goldman will be holding its earning call at 9:30AM when we should learn more about the bank’s operations going forward.
The earnings presentation is available here.