Goldman Sachs Market Making Revenues Spike Higher 164% from Q4

First quarter results from Goldman Sachs prove prime brokers are having a blast so far in 2018

After several major prime brokers have reported earnings late last week, Goldman Sachs is the next heavyweight to break records. The company’s market making operations have registered a 164 percent increase in revenues when compared to last quarter and a 33 percent increase when compared to the first quarter of 2017. The total amounted to $3.2 billion, a multi-year high for the company.

Overall, Goldman Sachs’ revenues in the first quarter from Institutional Client Services were $4.39 billion. The number is higher by 31 percent when compared to the first quarter of 2017 and by 85 percent when compared to the fourth quarter of 2017. The institutional client services unit of Goldman Sachs represented 43 percent of the total revenue of the firm.

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FICC Trading Charges Higher

Net revenues from the Fixed Income, Currency, and Commodities (FICC) Client Execution services were $2.07 billion. The figure is 23 percent higher than in the first quarter of 2017, due to significantly higher net revenues in currencies, commodities and credit products. The figure was partially offset by lower net revenues in interest rate products and mortgages.

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During the first quarter of 2018, the FICC unit operated in an environment dominated by much improved market-making conditions. Client activity was more robust, due to the increased volatility, leading to higher client activity compared with the fourth quarter of 2017. Net revenues from the FICC unit represented 20 percent of the total for Goldman Sachs in Q1 2018. 

Net revenues in the Equities unit were $2.31 billion, a figure which is 38 percent higher than Q1 2017. The results were driven by significantly higher net revenues in equities client execution, reflecting significantly higher results in both derivatives and cash products.

Goldman Sachs reports that commissions and fees were also higher, reflecting higher market volumes. Net revenues in securities services were higher, reflecting higher average customer balances.

Commenting on the results of Goldman Sachs in the first quarter, the CEO of the company, Lloyd Blankfein said: “Solid performance across our businesses produced strong returns in the first quarter. We are well positioned to serve our clients as the global economy continues to show strength and central banks unwind certain aspects of policy stimulus. We are also broadening our client base and further diversifying our businesses to drive more revenue and earnings growth for the firm.”

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