Goldman Sachs’ crushed analyst’s predictions in their second quarter, generating $7.93 billion in revenue, up from the $7.55 billion that was expected. The Wall Street bank earned $3.72 per share, a number that was predicted to be $3.08.
This comes at a time where global markets are feeling the impact of Brexit, Britain’s historical decision to leave the European union. Nevertheless, CEO Lloyd Blankfein remained confident
“Despite the uncertainty created by Brexit, we achieved solid results by continuing to serve our client across our diversified franchise by managing our business efficiently,” he said.
Through massive expense cuts – more than 400 employees have been dropped this year in New York, including traders and salespeople in the securities unit, and total staff fell by 2000 – Goldman was able to rebound in fixed-income trading, which rose 33 percent in Q2.
Despite their recent surge, however, Goldman Sachs’ banking revenues totaled $1.79 billion, an 11% drop from the same period last year, but still better than Q1 by 22%. Their financial advisory revenues also dropped 3% from a year ago at $794 million.
In a statement, the bank expressed their opinion on the challenging environment they currently operate in.
“Although market-making conditions generally improved compared with the first quarter of 2016, Fixed Income, Currency and Commodities Client Execution continued to operate in a challenging environment characterized by low interest rates, political uncertainty and concerns about global growth,” the firm said.
The Wall Street giant has been steadily making moves to improve their standing after being hit by the financial crisis in 2008. CEO Lloyd Blankfein has been restructuring the company, effectively cutting costs and changing focus.
Recently, it announced a plan to start an internet bank surprisingly not for the 1%, but for middle income Americans. In early 2016, Goldman also purchased a company that manages 401(k) plans for small businesses. By making the firm more accessible, Goldman hopes to boost its profitably, but only time will tell.