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Enhanced Bond Trading Boosts Revenues Of Goldman Way Past Market Estimates


04/19/2018


Enhanced Bond Trading Boosts Revenues Of Goldman Way Past Market Estimates
An increase in trading in bonds and stocks because of volatility in the market propelled Goldman Sachs Group Inc to report good quarterly results well above the market predictions and estimates.
 
 There was a growth of 23 per cent in the average revenue from the bond trading business of the bank which stood out as the outperforming business segment for the lender in the first quarter of the current year.
 
On the overall, the biggest business of Goldman – trading, generated revenues that were 30.5 per cent over the last year’s figures for the same period primarily driven by market volatility in the month of February following a steady and prolonged cam period in 2017. The trading in stocks, bonds, currencies and commodities was boosted which stayed high till the end of March.
 
There was also a 1.4 per cent rise in its stock price following the reporting.
 
There was increase in revenues in all of the four business segments boosting the total revenues., including net interest income, to $10.04 billion – a 25 per cent rise year-on-year.
 
The $1.8 billion-$2.3 billion in revenue that was generated by Goldman from each of its business units was described as “pretty impressive” by Evercore ISI analyst Glenn Schorr.
 
“Obviously it won’t always be this good, but sure is cool to see a good old Goldman beat in a quarter that was far from the perfect backdrop,” he wrote in a note to clients.
 
The bank had made a concerted effort to court asset managers and banks to do business with the firm as a part of its strategy for growth in the current year for bond trading which the company wants to take to $5 billion in revenues annually after a sharp fall last year. this way the banker wants to expand its client base where the focus is on enhancing the number of corporate clients especially dealing in the commodities and currencies segment. The bank wants to lend more to clients and is hiring more trading talent.
 
There was cautious optimism among the management of the lender about the continuance of the present conditions that led to the outperformance, said Chief Financial Officer Marty Chavez.
 
He said that an added lift would be provided by the plan of the bank to generate more revenue by attracting more new clients and by creating more products and services to offer to clients.
 
There was arise of 27 per cent in the net income applicable to common shareholders to $2.74 billion, or $6.95 per share. And according to Thomson Reuters I/B/E/S, this was way ahead of the average analyst estimate of $5.58 per share.
 
While there was airs of 3.5 per cent in the revenues form investment banking, which includes underwriting fees., the lender noted a jump of 43 per cent in the revenues generated from investing and lending.
 
(Source:www.reuters.com)