Goldman Sachs Reports Dip in Q2 Profit, FICC Revenues Fall

Low volatility weighed on FICC revenues.

This Tuesday Goldman Sachs has reported its financial results for the second quarter of its 2019 fiscal year ended June 30, 2019, revealing 5.6 percent fall in quarterly profit.

For the second quarter of 2019, the New York-headquartered firm recorded net revenues of $9.46 billion. This is lower by two percent when measuring it against the same quarter of last year, and seven percent higher than the first quarter of 2019. 

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Net earnings came in at $2.42 billion for the second quarter or $4.67 billion year-to-date. When comparing Q2’s results quarter-on-quarter, it is higher by 7.5 percent. However, on a yearly comparison, it is lower by 5.6 percent.

Revenues were largely dragged down due to a sluggish performance in the fixed-income unit of the Group, as well as weakness in debt underwriting.

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FICC revenues drag down results

Net revenues in Institutional Client Services, which includes revenues generated from Fixed Income, Currency, and Commodities (FICC), was $3.48 billion for the second quarter of 2019. This is three percent lower than the second quarter of 2018 and four percent lower than the first quarter of 2019. 

Taking an even closer look, the net revenues for the FICC Client Execution were $1.47 billion. Against the second quarter of 2018, it’s lower by 13 percent. This reflects significantly lower net revenues in interest rate products and currencies as well as lower net revenues in credit products, the statement said. 

However, this lackluster performance was partially offset by higher net revenues in commodities and mortgages. As pointed out by Goldman Sachs, the second quarter was categorized by low volatility and low client activities.

Looking ahead, Goldman Sachs will: “Remain focused on expanding our addressable market and broadening client relationships while investing in automation and platforms to improve efficiency.”

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