Friday, March 29

Goldman Sachs disappoints the market with its 2021 results


The fall in the shares of Goldman Sachs at fourth quarter of 2021 reflects the cooling of the monetary stimulus after the pandemic covid-19, according SridharNatarajan en Yahoo Finance.

The business operation income from the bank fell a 7%, below analysts’ estimates of a small gain. The surprising disappointment came from his stock business, which decreased by 11%, according to a statement on Tuesday. Despite completing its best year for both revenue and earnings, Goldman executives will need to address investor concerns that the trading business is on a downward trajectory.

Compensation and benefits, the single largest driver of spending at Goldman, rose by 33% to $17.7 billion in 2021, an indication of big rewards for employees after a record year.

Senior executives of JPMorgan Chase & Co. y Citigroup Inc. took turns last week lowering Wall Street’s earnings expectations this year after posting larger-than-expected declines in trading over the final three months of 2021. JPMorgan they fell a 6,2% on Friday, its biggest drop in more than 18 months.

The business boom triggered by the Covid-19 market volatility could be starting to fade, and companies must deal with higher costs to prevent employees from leaving. That leaves banking leaders with the task of resetting expectations.

Goldman shares fell 8.4% to $349.12 in the early hours of this Tuesday, its biggest intraday decline since June 2020. The stock was one of the success stories of the pandemic, rising one 45% last year. But investors have already turned their attention to how the firm will fare in quieter markets, with the price stagnant in recent months and trading below levels set in June.

The company’s earnings release marked the public debut of Denis Coleman III as CFO. Coleman previously led the global financing group and replaces Stephen Scherr, who held the position for more than three years.

At a time when competition for talent and salary pressures have become major issues, Goldman is rewarding its partners, roughly 400 executives, with a one-time special award, Bloomberg reported last week. That payment will be in addition to his typical cash and bonus compensation, which ranges from a few million dollars and multiples after a year of record earnings.

The investment banking revenue of $3.8 billion they beat the average analyst estimate of $3.07 billion. That was driven by his business of merger advisory, as well as by the debt underwriting, which increased by 80% compared to the previous year. Dealers at the firm, which has dominated a year of merger mania, will be among the biggest beneficiaries of rising salaries. Executives have considered increasing the bonus fund for investment banking up to a 50%.

the business of asset Management, which includes its alternative investment platform, had revenue of $2.89 billion, 10% less than the previous year. The decline was driven by lower income from equity investments as well as from loans.

income in the consumer and wealth business of the bank increased by 19% to nearly $2 billion. Earlier this month, Goldman announced a new credit card with General Motors, adding another Main Street brand to the list. The deal is Goldman’s second major co-branded deal, following the launch of a high-profile credit card with Apple in 2019.

The provisions for credit losses increased a 44% linked to the growth of card balances, as well as those related to the General Motors portfolio.

Also in the fourth quarter results:

  • The net income they fell a 13% to $3.94 billion, or $10.81 per action. Adjusted earnings were expected to be $11.65 a share, according to the median estimate from a Bloomberg survey.
  • The company-wide revenue they totaled $12.6 billion, compared to an average estimate of $12 billion
  • The debt underwriting income increased a 80% to $948 million, while the company obtained $1.03 billion for capital subscription, 8% less than the previous year

Goldman Sachs is trading at $352 and Ei indicators are bearish.



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