In the world of finance, the big banks of JPMorgan, Citigroup, Bank of America, Morgan Stanley and Goldman Sachs are watched carefully because credit moves with the banks. On one hand everyone is happy to see how much, on the other hand they are large institutions who trade for their own accounts and advise companies around the world. Goldman experienced a 56% increase in M &A, higher revenue on equity trading but a slower bond market.
Goldman’s plan in 2017 was to generate an extra $5 billion in annual revenues by growing its consumer operation, wooing new institutional customers and persuading existing customers to do more business with the bank. In an article by Aparajita Saxena and Elizabeth Dilts of Reuters, Goldman is doing just what they set out to.
Goldman reported a profit of $2.3 billion or $6.04 a share, the street was looking for $4.45 a share. Total revenue was $8.1 billion with $1.2 billion in M&A fees.
Goldman tends to be more sensitive to market fluctuations than peers that have large, stable revenue streams from other services.
Linking to dividend paying stocks, when a company has large stable revenue streams it is always a double edged sword. On one side is the profits generated from it ensures dividend payments; on the other side is many nimble players are trying to ensure the money comes to them and the company is sometimes is less risk than its peers. It tends to be a balancing act and sometimes companies get it right, sometimes they miss out.
There are more questions than answers, till the next time – to raising questions.