Goldman Sachs beat expectations for quarterly profit yesterday, driven by strength in dealmaking and equities trading, although its shares fell nearly 4 per cent on weakness in its fixed income, currencies and commodities division.
Revenue from the division fell 10pc to $4.01 billion in the first quarter, hit by a slowdown in interest rate trading, mortgages and credit products.
“The stock is weak in premarket trading due to the disappointment in FICC trading, in our view,” RBC Capital Markets analyst Gerard Cassidy said.
The drop in Goldman shares was also a drag on its peers, with Morgan Stanley and JPMorgan sliding about 1.3pc each.
The bank’s equities trading business, however, had a record quarter, with revenue from trading intermediation and financing rising 27pc to $5.33 bn.
Global markets have been roiled by the Iran war as rising crude oil prices fan inflation fears and exacerbate worries about a recession.
The heightened volatility in the equities market has prompted clients to reassess portfolios and hedge downside risks, buoying equity trading desks at large banks.
“The geopolitical landscape remains very complex - so disciplined risk management must remain core to how we operate,” Goldman Sachs CEO David Solomon said in a statement.
Overall, profit per share stood at $17.55, beating analysts’ average estimate of $16.49, according to data compiled by LSEG.
Wall Street executives expect a strong year for mergers and acquisitions despite the current uncertainty from the Middle East conflict.
&uuid=(email))