At least somebody benefited from a rocky start to the year for US equities.
“Somebody” in this context means big banks, whose equity trading businesses enjoyed a windfall during Q1.
There’s always a theme for Wall Street quarterly results — some thread that’s common across banks. This season, it’s blockbuster equities trading.
On the heels of impressive, consensus-beating hauls from JPMorgan and Morgan Stanley late last week, Goldman on Monday said its equities traders rang up $4.19 billion of revenue during the first three months of the year. That’s up 27% from Q1 2024 and it’s a record. Consensus expected $3.80 billion.
FICC missed, with revenue of $4.40 billion, up an uninspired 2% YoY against $4.70 billion expected.
IB came in a little light, as it did for JPMorgan. Fees of $1.92 billion at Goldman fell 8% YoY and undershot the $2.03 billion consensus. Advisory missed by a mile. Revenue there was $792 million, nowhere near the $911 million consensus. Goldman said its IB backlog rose versus end-2024.
Overall, Global Banking & Markets revenue of $10.70 billion topped estimates by $300 million. Remember: That’s the bread and butter. David Solomon somehow lost track of that simple reality (a “You had one job!” moment) in the course of pursuing a since-abandoned push into mass market consumer banking. He refocused the firm in mid-2023, and Goldman eventually found its way again.
Amusingly, Platform Solutions (which houses the sad remnants of Solomon’s consumer dream) actually turned a pre-tax profit of $25 million despite lower revenue YoY. Analysts expected a $110 million loss.
Don’t make anything of that. It’s just trivia.
Obviously, Goldman will be keen for more clarity from the Trump administration. Volatility’s great for banks’ trading businesses right up until it manifests in a crash, which helps no one, and the ambiguity around Trump’s tariffs will eventually torpedo dealmaking, ECM and so on.
Firmwide revenue in Q1 at Goldman was $15.1 billion, ahead of consensus and among the best top-line readouts ever for the bank. EPS was $14.12.
“In times of great uncertainty, clients turn to Goldman for execution and insight,” Solomon mused Monday, in what, if you don’t run in market circles, comes across as a comically overstated assessment of the firm’s capacity for enlightenment. As if, when two roads diverge in a yellow wood, regular people think, “Gosh, what would a Goldman banker do?”
Solomon went on to say he’s “confident” in the firm’s ability to support clients in what he called “a markedly different operating environment than earlier this year.”
