Chillin' out till it needs to be funded
Investment Banking revenues rose sequentially to $1.2 Bln even as 98% of the Financial Advisory deals signed in the first half were in the smallest fee bracket and Debt underwriting surprisingly rose for Goldman Sachs globally by nearly 20% sequentially. There were 13 $20B + deals in the two quarters since Christmas. The firm still has good volumes in Client Equities at $1.7 B almost equal with FICC share of $2.2B
Client Trading revenues did shrink 33% for the quarter at Goldman Sachs but it seems the Street went overboard in measuring the impact of lost revenue on profits as the Firm’s $6.6 B overall revenues even with only $3.8 B from client trading (Institutional Client Services) led the firm to maintaining its year ago Q2 performance more or less ith $927M in profits. The number is down by half sequentially and the Consolidated revenues for the First half at $16.5 B yielded a good $3B in profit or a Sales margin of 18.2% with the inevitable Comp ratio for the first half at 44% Non compensation expenses were down 4% sequentially at $2.30B
The firm’s Q2 EPS at $1.78 is the same as it posted a year ago, making the comeback year slow but proud for the Firm. Its Tangible Book value of $126 is still an easy hit for the firm on the exchanges as it has another 45 M shares left in the authorised buyback program inventory.
Fund management revenues were up 13% sequentially and Proprietary Investing and Lending made up the rest. CAR is above 15% as per Basel I as the firm avoids reporting Basel III numbers which are much above the required thresholds, its Tier I common at 13% on Assets of $949 B
The firm raised $1.75B in Capital from Perpetual Preferred stock and repurchased 14.3 Mln shares apparently at an average of $105 for $1.5B. The stock starts post earnings at $98. The Conference begins in an hour