Goldman Sachs (GS) and Bank of America (BAC) beat the forecasts for the fourth quarter on Wednesday after JPMorgan Chase (JPM) and Citigroup (C)) reported mixed results.
Goldman Sachs Earnings
Estimate: Goldman Sachs earnings per share down 5% to $ 5.37. Analysts expect a sales increase of 1% to 7.9 billion US dollars.
Results: EPS of $ 6.04 on revenue of $ 8.08 billion. Fixed income trading decreased 18% to $ 822 million while stock trading rose 17% to $ 1.6 billion. Investment banking revenues decreased 5% to $ 2.04 billion. Financial advisory revenues increased 56% to $ 1.2 billion, led by higher M & A volumes. Investment and credit income declined 2% to $ 1.9 billion. Investment Management revenues increased 2% to $ 1.7 billion.
"We are pleased with our performance for the year and are posting stronger results and gains despite a difficult environment for our market-making businesses in the second half of the year." CEO David Solomon. "We achieved double-digit sales growth in the current year, the highest earnings per share in the company's history and the highest return on equity since 2009."
The Goldman Sachs share gained 3.3% today. Rival Morgan Stanley (MS), reporting Thursday, gained 2%.
Wall Street's trading desks had a fourth quarter. On Monday, Citigroup said fixed income income declined 21% to $ 1.9 billion, while equity returns rose 18% to $ 668 million. On Tuesday, JPMorgan said fixed income income fell 16% to $ 1.9 billion in the fourth quarter. Stock market returns increased 15% to $ 1.3 billion.
Bank of America Results
Estimates: Wall Street expects Bank of America's earnings per share to increase by 34% to 63 cents. The Street sees an increase in sales of 9% to 22.21 billion US dollars.
Results: EPS of 70 cents on sales of $ 22.7 billion. Consumer revenues increased 10% to $ 9.88 billion, mainly due to higher interest rates and growth in deposits and credit. Asset and Investment Management revenues increased 7% to $ 4.99 billion. Global banking revenue increased 1% to $ 5.05 billion. Fixed income trading income decreased 15% to $ 1.4 billion, while equity trading revenues increased 11% to $ 1.1 billion.
"Through trillions of dollars in consumer transactions, we are processing the confidence and activity of our small business and trade customers." We see a healthy consumer and business climate that drives a solid economy, "said Chairman and CEO Brian Moynihan each of our companies has the opportunity to grow even further. "
Bank of America's stock rose 5.2% in trading before trading, and the stock on Monday and Tuesday found support in its 50-day line. The 50-day line represents an important test of investor support.
Wells Fargo (WFC), who missed revenue on Tuesday, rose 0.3% early Wednesday, with JP Morgan and Citigroup down + 0.4%, respectively.
In light of worries about trading tensions and a possible economic downturn in bank stocks, executives at Citigroup and JP Morgan said that the underlying host data are still sound. Both banks said that trade had improved against the fourth quarter this month, as a hard selloff got some customers out of control.
However, JPMorgan said that first-quarter net interest expense would remain unchanged compared to the first quarter of the fourth quarter. In the lending business, the company also signaled that it would be ready to relinquish its competitors if it maintained decent returns.
Government Withdrawal, Brexit and Bank Shares
Executives of these banks also wondered what the US government is thinking of. Shutting down the government could affect the business. Bank of America's business is focused on the US, which exposes it to greater pressure on US affairs and interest rate hikes by the Federal Reserve.
JPMorgan CEO Jamie Dimon said, "We are ready to help all our clients in a challenging environment, be it a deadlock or a recession.
JPMorgan's CFO Marianne Lake said Tuesday that investment banking could have an impact on investment banking if the SEC can not approve IPOs and dealmaking if government agencies can not approve mergers and acquisitions.
After Tuesday's British Prime Minister Theresa May failed to pull the nation's withdrawal from the European Union in parliament, banks could ask themselves more questions about how they see their clients' turbulence.
In a call with reporters Before the vote in the British Parliament, Dimon said he did not believe that a so-called hard Brexit would take place. In a tough Brexit, the UK would completely break from the bloc and completely disassociate itself from the EU single market. This form of departure was considered much more difficult for the nation.
The big US banks have used London as a springboard to other parts of Europe. The so-called "passporting" of the EU makes it easier for banks to conduct their business in the member states.
Goldman Sachs faces company-specific difficulties. Goldman is at the center of investigations into the alleged plunder of the Malaysian government investment fund 1MDB.
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