Goldman Sachs today reported net revenues of $8.61bn and net earnings of $1.93bn for the three months ending 30 June 2013. Adjusted earnings per share (EPS) were $3.70, over double the $1.78 from the year before, but down from $4.29 in the first quarter of 2013. Analysts had expected EPS to come in at $2.78.
Investment banking net revenues were up 29 per cent from the year before to $1.55bn, driven higher by a 45 per cent increase in revenues in its underwriting business. Institutional clients services revenues were up 11 per cent to $4.31bn – including a 12 per cent boost in fixed income, currencies and commodities (to $2.46bn) and a nine per cent rise in equities ($1.85bn) – investment management revenues were flat at $1.33bn, and investing and lending revenues came in at $1.42bn.
Thanks to a boost in revenues, the amount set aside for staff salaries, bonuses and benefits rose 27 per cent year-on-year to $3.7bn. With staff numbers falling one per cent to 31,700, average compensation per worker in the second quarter alone was $116,719. That's on top of the $134,365 for each in the first quarter ($4.34bn shared between 32,300 employees).
Chairman and chief executive Llyod Blankfein said:
The firm’s performance was solid especially in the context of mixed economic sentiment during the quarter. Improving economic conditions in the U.S. drove client activity and the strength of our global client franchise allowed us to deliver positive performance across a number of our businesses. While the operating environment has shown noticeable signs of improvement, we continue to put a premium on disciplined risk management, particularly in regard to the firm’s strong capital and liquidity levels.
Of course, the figures should be taken in some context.
The year over year comparisons are ridiculous. 2nd Q 2012 was horrific for Wall Street. Of course things look better compared to that.— John Carney (@carney) July 16, 2013
Here's Bloomberg's Erik Schatzker on why this might not have been such a good quarter for Goldman (return on equity of 10.5 per cent "pretty much the cost of capital" for a firm of this size):