Goldman Sachs reported record earnings bolstered by growth in investment banking and a record $2.3 trillion in assets under supervision, according to an earnings call on Tuesday.
Yet there is concern the Delta variant of the coronavirus may spread and “spear policy actions with slow economic growth,” CEO David Solomon said on the earnings call, according to
Bloomberg News
He added that some communities in the U.S. are seeing slow vaccine take-up.
“Widespread vaccine distribution and high vaccine rates are critical to open and thriving economies,” Somomon said. “I want to urge policymakers, government officials and business leaders across jurisdictions to do all they can to facilitate these efforts.”
- Earnings: Goldman Sachs earned a net income of $5.5 billion on revenue of $33 billion in the second quarter.
- Investment banking: Goldman Sachs’ Investment Banking revenues for the second quarter of 2021 were significantly higher, year over year, and had its second highest quaternary net revenue of $3.6 billion. “Financial Advisory revenues of $1.3 billion reflected an elevated number of deal closings in the quarter and increasing market position of our business as we have expanded our client footprint,” said Stephen Scherr, CFO.
- Consumer and wealth management: Net revenue for the second quarter of 2021 was a record $1.7 million. Wealth Management revenues of $1.4 billion primarily reflected the impact of higher average assets under management and higher loan balances.
- M&A: Debt Underwriting net revenues were $950 million. “Performance [was] supported by strong high-yield volumes and, importantly, robust acquisition financing activity including LBOs, as well as strong M&A and financial sponsor activity. This performance reflects the integrated nature of our Financing and Advisory businesses, as well as our dominant share in financial sponsor activity,” Scherr said.
- Underwriting performance: had its second highest quarterly revenues following a record performance in the first quarter. Equity underwriting performance generated $1.2 billion in revenues amid elevated IPO activity. Goldman Sachs ranked No. 1 globally in equity underwriting, with volumes in the first half of the year climbing to $85 billion across 400 deals. “That represents volume market share of 10%, up 40 basis points versus full year 2020. Notably, we led over 160 IPOs for the year-to-date, more than all of last year,” Scherr said.
- Remark: “With roughly 50 prcent of our people in these offices back on a regular basis, I can tell you that seeing them in our buildings again has been completely invigorating. We recognize that various geographies are navigating different stages of the pandemic and we’ll continue to provide our colleagues with the support they need,” Solomon said.
