Goldman Sachs: The values ​​of the day on Wall Street – Good performance for Goldman Sachs and mixed copy for Bank of America

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Goldman Sachs gained 3.34% to $333.70, ahead of Bank of America, which rose 1.02% to $32.58. If the first revealed a lower than expected drop in profits, the second had to. Bank of America’s accounts, however, contain some good news, such as the sharp rise in interest income. The two American banks suffered from the decline in their debt and equity issuance activities.

In the second quarter, Goldman Sachs saw its net profit attributable to the group fall by 48% to 3.79 billion dollars, or 7.73 dollars per share. As is traditional for Goldman Sachs, the FactSet consensus is a far cry from reality at $6.56. Revenues fell 23% to $11.86 billion, but exceeded Wall Street forecasts of $10.78 billion.

Goldman Sachs faced a 41% drop in revenue from its $2.14 billion investment banking business due to high market volatility. Its businesses on the primary equity and debt markets thus saw their revenues drop by 89% to 131 million dollars and 52% to 457 million dollars respectively.

Conversely, its market activities performed well. Bond (FICC) and equity brokerage grew 55% to $3.6 billion and 11% to $2.86 billion, respectively.

For its part, Bank of America failed to meet investors’ expectations. In the second quarter, net income fell to $6.2 billion, or 73 cents per share, from $9.2 billion and $1.03 per share, respectively, a year earlier. The FactSet consensus was 75 cents.

Net banking income increased by 5.6% to 22.7 billion dollars, supported by the 22% jump in net interest income to 12.4 billion dollars. The latter have benefited from the rise in interest rates and the growth in loans. On the other hand, its commissions in investment banking fell by 47% to 1.1 billion dollars due to a difficult context for the activity of debt and equity issuance.

Bank of America accounts were penalized by $553 million in bad debt provisions, up $2.1 billion. The bank had recorded reversals of provisions amounting to 2.2 billion dollars a year earlier.

AOF 2022

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