Goldman Sachs and Morgan Stanley profits fall in the fourth quarter

Today, January 17, the last two banks included in the so-called big six leading US financial corporations, Goldman Sachs (GS) and Morgan Stanley (MS), reported for the fourth quarter and all of 2022. Reporting from the four Big Six banks – Bank of America, JPMorgan, Citigroup and Wells Fargo – was published last Friday.

Reports of GS and MS as a whole continued the trend shown by their competitors: amid the deteriorating macroeconomic situation, the activity of companies in the financial market (mergers and acquisitions, new placements of securities, etc.) significantly decreased, which hit the profits and revenues of investment banks.

Goldman Sachs, which focuses mainly on investment banking and does not have significant retail operations, saw its fourth-quarter earnings fall particularly sharply, down 66% to $1.33 billion compared to the fourth quarter of 2021. And unlike a number of other banks, which still met analysts’ forecasts for profit, GS was unable to do this, and the discrepancy turned out to be quite significant. FactSet Analysts forecast quarterly earnings of $5.56 per share, while GS showed only $3.32. As a result, after the publication of financial statements, GS shares fell by 6.6%.

luckier reported Morgan Stanley Bank. Although he reported a decrease in profit in the fourth quarter, but not as significant as that of Goldman Sachs: by 41%, to $ 2.1 billion ($ 1.26 per share), and also met the forecasts of Refinitiv analysts who expected $1.19 per share. As a result, Morgan Stanley shares jumped 6.1% after the publication of financial statements.

Evgeniy Khvostik