After announcing its first quarter results last month, Goldman Sachs today released its Form 10-Q. It confirms some things that were known already, and adds several new ones.
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We already knew that Goldman’s fixed income and equities traders did pretty well in the first quarter: revenues in each area were up 10% year-on-year, whereas at JPMorgan they were down 7% and flat. Goldman’s 10Q helps explain why.
As the chart below shows, Goldman Sachs’ markets business made more than $100m profits on 23 days in the first quarter, or 37% of the time. This was one more day than last year, when its traders also had a single day of more than $100m in losses.
Goldman Sachs’ trading profits
Source: Goldman Sachs 10Q
Which kinds of traders made those profits? Seemingly not the traders on Goldman’s rates desk. Goldman already said that it suffered “slightly lower net revenues in interest rate products” in the first quarter. The table below suggests that when realized and unrealized market making gains and losses are taken into consideration, it was a particularly bad quarter in rates. Hedges will mean that these losses were not realized in their entirety, but still. Q1 was far easier for credit and FX traders than for traders on other desks.
Source: Goldman Sachs 10Q
What about the investment bankers? Goldman’s M&A bankers bucked the trend in the first quarter, with a 24% year-on-year increase in advisory revenues even as M&A revenues fell at other banks. Goldman’s 10Q suggests this was the result of a rush of announced M&A deals that have not yet been completed. As deals reach completion, M&A fees will presumably rise even more. Goldman may even want a few new junior bankers in anticipation of this.
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