Beyond the trading activities – still among the mainstays of operations – Goldman Sachs reported June quarter earnings that showed a continued uptake in consumer banking (including its Marcus business). High-level numbers beat the consensus, as earnings of $15.02 a share were leagues better than the $10.24 expected by the Street. Revenues of $15.4 billion outpaced the Street at $12.2 billion.
Consumer Banking Traction
Drilling down into the segments, the company said that consumer and wealth management, which includes the digital bank known as Marcus, saw a record $1.8 billion of net revenues in the period. The company said in its supplemental materials released alongside earnings that the consumer banking operations saw revenues of $363 million, 41 percent higher than a year ago, as deposits and credit card balances grew. It’s worth noting that a robust IPO market buoyed revenues from investment banking, at $3.6 billion.
And, according to the earnings materials, the company had a net benefit of $92 million tied to its provision for credit losses, as reserves were reduced on wholesale and consumer loans. The firm’s total allowance for credit losses at the end of the period stood at $4 billion at the end of the June period.
CEO David Solomon said during the conference call with analysts that “the strength, breadth and diversity of our business remained evident this quarter.” He noted, too, that the company continues to leverage its engagement with clients across both traditional and digital platforms. Among those efforts: Goldman launched its Apple Card for families, which allows co-owners on the same account to build credit together “as equals,” as Solomon noted.
Separately, transaction banking continues to gain ground, where management said on the call that this segment has 300 clients with roughly $40 billion in deposits.
Asked during the Q&A about possible acquisitions, Solomon noted that the company is “continuing to invest in and grow the opportunity in our wealth management business and for broadening our digital consumer banking platform. There may be opportunities from time to time that can accelerate the direction of travel in those [areas]. We look at things constantly. If we see things that can accelerate the direction of travel in those businesses and accelerate our goals and those businesses … we’ll certainly consider them.”
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