:max_bytes(150000):strip_icc()/GettyImages-1638089906-55d82f34058e4fd2a8e52531a45e7336.jpg "Goldman Sachs’ Q2 Profit Jumps 150% on Higher Investment Banking Revenue")
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Key Takeaways
- Goldman Sachs’ second-quarter profit more than doubled year-over-year as revenue from investment banking fees and asset management surged.
- The banking giant’s results came in higher than analysts expected, joining other banks like Wells Fargo, JPMorgan Chase, and Citigroup in beating Q2 estimates.
- Goldman also announced plans to raise its dividend to $3 per share, up from $2.75 per share previously.
Goldman Sachs‘ (GS) efforts to refocus on its Wall Street operations is paying off, as second-quarter investment banking revenue jumped over 20% from a year ago, helping profits more than double.
The bank reported second-quarter profit of $3.04 billion, 150% higher than last year and just above the $2.99 billion analysts had expected. Goldman reported earnings per share (EPS) of $8.62, above the $8.42-per-share consensus estimate of analysts compiled by Visible Alpha.
Net interest income (NII) rose 33% from last year to $2.24 billion, well above analysts’ expectations of $1.66 billion. The jump in NII helped drive total revenue up 17% to $12.73 billion, above the $12.42 billion estimate.
Investment Banking, Higher NII Boost Goldman’s Results
Similar to the first quarter of 2024, Goldman’s results were boosted by higher revenue from investment banking and wealth management operations. Goldman has been focusing on its Wall Street operations after stepping back from its outreach into consumer lending last year.
Unlike its banking colleagues JPMorgan Chase (JPM), Citigroup (C), and Wells Fargo (WFC), which reported second-quarter earnings last Friday, Goldman recorded higher net interest income than the previous quarter.
Analysts have said that banks’ NII could fall over the next fiscal year or two if the Federal Reserve cuts interest rates, which it’s expected to do at least once later this year.
“We are pleased with our solid second quarter results and our overall performance in the first half of the year, reflecting strong year-on-year growth in both Global Banking & Markets and Asset & Wealth Management,” Goldman Chief Executive Officer (CEO) David Solomon said.
The company also announced plans to raise its quarterly dividend by 9% to $3.00 per share, up from $2.75 previously.
Goldman shares rose less than 1% to $483.80 as of 10:15 a.m. ET Monday. They are up about 25% since the start of the year.