Goldman Sachs Group, Inc. (GS) announced on Monday a remarkable 48% increase in net profit for the third quarter compared to the previous year. This growth was primarily driven by reduced operating expenses and an 8% increase in revenue, even amidst a substantial rise in provisions for credit losses. Both earnings per share and quarterly revenue exceeded analysts' projections.
"Our performance underscores the resilience and strength of our exceptional franchise in an improving economic landscape," stated David Solomon, Chairman and CEO.
For the third quarter, net earnings attributable to common shareholders rose significantly to $2.78 billion, equating to $8.40 per share, from $1.88 billion or $5.47 per share in the same quarter of the previous year.
According to Thomson Reuters, 16 analysts had anticipated the company to report earnings of $6.89 per share for the quarter, with these estimates typically excluding special items.
The provision for credit losses dramatically increased to $397 million this quarter, up from just $7 million in the prior year, primarily attributed to elevated net provisions related to the credit card portfolio, largely driven by net charge-offs.
Total operating expenses decreased by 8% year-over-year to $8.32 billion, reflecting a write-down of intangibles associated with GreenSky in the prior year and significantly lower impairments related to consolidated real estate investments. This decline was partially offset by increased transaction-related expenses and a write-down of intangibles related to the GM credit card program.
Total net revenues for the quarter rose 7% to $12.70 billion from $11.82 billion a year ago, supported by higher net revenues in Global Banking & Markets and Asset & Wealth Management. Analysts had expected revenue to be around $11.80 billion for the quarter.
Net interest income climbed 70% to $2.62 billion, while total non-interest revenues slightly decreased by 2% to $10.08 billion compared to last year.
In Global Banking & Markets, net revenues reached $8.55 billion, up 7% from the previous year, fueled by robust performance in Equities and record quarterly net revenues in Fixed Income, Currency, and Commodities (FICC) financing.
Asset & Wealth Management reported a 16% increase in net revenues to $3.75 billion from the prior year, driven by record quarterly Management and other fees and net gains in Equity investments compared to net losses in the previous year.
Conversely, net revenues in Platform Solutions saw a 32% decline to $391 million, attributable to significantly lower net revenues in Consumer platforms.
Furthermore, on Friday, the Board of Directors of The Goldman Sachs Group, Inc. declared a dividend of $3.00 per common share, set to be distributed on December 30, 2024, to shareholders recorded by December 2, 2024.
