Oct 19, 2021 | Shaoni Ghosh
Goldman Sachs, an American multinational financial services company provides investment banking, investment management services along with financial services to financial institutions. The company offers services in asset management, securities, prime brokerage, commodities and others.
(Must Check: An Introduction to Financial Analysis)
The company is compartmentalized into several divisions such as Investment Banking, Global Markets, Consumer & Wealth Management etc. and comprises subsidiaries including that of Marcus by Goldman Sachs, Goldman Sachs Capital Partners and others.
The Goldman Sachs Group, Inc. was founded in the year 1869 and is headquartered in New York. The group also comprises public offerings as well as private placements of loans and derivative transactions.
In the third quarter, the New York-based firm plunged into 60 percent. This occurred due to the deal that overpowered the financial world like the pennies from heaven this summer. It was purchased for hundreds of millions of dollars in fee revenue.
Surprisingly, it got hold of a profit of $5.28 billion, or $14.93 per share. If viewed from the comparative lens, it obtained a profit of $3.23 billion, or $8.98 a share, a year ago.
The outcome proved to be comparatively better than the $10.10-per-share earned profit that business analysts had expected in the process.
However, the post-pandemic situation has led to the economic upsurge, though it was a gradual recovery. Therefore, it has succeeded in bringing new companies into the spotlight, and opening new pathways that may lead to the companies' growth in return on an individual basis.
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This has "gone straight to Goldman's bottom line", as BusinessStandard suggests. The plunge in profit originated from Goldman's advisory and investment banking services. And in this way, the firm helps other companies to shift to the public or purchase other companies.Last quarter, the firm produced $3.7 billion in investment banking revenue, up 88 percent from that of a year ago.
According to Renaissance Capital, in the United States, a total of ninety-four public offerings have raised $28 billion which amounts to the highest number of IPOs for a third quarter since the year 2000.
Even the firm's rival Morgan Stanley also gave an account of a huge plunge with respect to its profits due to its advisory business. Simultaneously, JPMorgan Chase and Citigroup reportedly shared a similar footing in terms of its profit returns due to their respective investment banking business.
Even though Goldman Sachs' weren't that eye-catching as in the advisory business, yet it held an upper hand in trading, since it had a strong quarter.
The firm's trading desks earned $5.61 billion in the third quarter, up by 23% over the previous year. While bond, commodity, and currency trading remained largely steady, Goldman reported a 51% increase in stock trading income over the previous year.
The company's overall revenues were $13.61 billion, much above analysts' expectations of $11.72 billion. On 15th October Goldman Sachs' stock was up by 1.9 percent in the morning trading.
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