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July 13, 2021

Goldman Sachs Q2 2021: consumer, wealth management revenues +28%

By Douglas Blakey

Goldman Sachs Q2 2021 net revenues in Consumer & Wealth Management of $1.75bn are +28% from the year ago quarter.

On the other hand, the numbers are essentially unchanged compared with the first quarter of 2021. Net revenues in Wealth management of $1.38bn are 25% higher than the second quarter of 2020. Management and other fees are higher, reflecting the impact of higher average assets under supervision. Net revenues in Private banking and lending are ahead, primarily reflecting higher loan balances.

Net revenues in Consumer banking of $363m are 41% higher than the second quarter of 2020. This reflects higher deposit and credit card balances.

Strong M&A activity results in Goldman Sachs’ investment banking division posting a 36% revenue increase for the second quarter.

Goldman Sachs Q2 2021: investment banking revenues beat forecasts

Investment banking revenue of $3.6bn for the quarter beats analyst forecasts. A drop in fixed income trading results in trading revenues falling from $7.2bn to $4.9bn.

The decrease in net revenues is due to significantly lower net revenues in FICC intermediation. This reflects significantly lower net revenues in interest rate products, credit products and commodities. In addition, the bank reports lower net revenues in mortgages and currencies. In addition, net revenues in FICC financing are lower. This reflects lower net revenues from repurchase agreements, partially offset by higher net revenues from mortgage lending.

The bank’s asset-management business, reports revenue of $5.13bn, more than doubling the revenue in the year ago period.

Goldman Sachs dividend to rise by 60%

Provision for credit losses represents a net benefit of $92m for the second quarter of 2021. This compares with net provisions of $1.bn for the second quarter of 2020 and a net benefit of $70m for the first quarter of 2021. The second quarter of 2021 includes reserve reductions on wholesale and consumer loans. This reflects continued improvement in the broader economic environment.

Goldman Sachs shares remain unchanged at around $380, up more than 40% for the year to date. Goldman will raise its quarterly dividend from October by 60% to $2 per share.

“Our second quarter performance and record revenues for the first half of the year demonstrate the strength of our client franchise and our continued progress on our strategic priorities. While the economic recovery is underway, our clients and communities still face challenges in overcoming the pandemic,” says David Solomon, Goldman Sachs chair and CEO.

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