Bad News For Goldman, Still Better Than Expected (GS, MS, MTU, BAC, JPM, LYG, BCS, RBS)

The Goldman Sachs Group GS reported Q1 EPS of $1.56, nearly doubling the consensus estimate for a $0.82 per share profit. Revenues for the quarter were down 7% year-over-year to $11.89 billion, but were well above the consensus estimate of $10.18 billion. Lloyd C. Blankfein, Chairman and Chief Executive Officer expressed his upbeat mood by saying, “We are pleased with our first quarter results. Generally improving market and economic conditions, coupled with our strong client franchise, produced solid results. Looking ahead, we continue to see encouraging indications for economic activity globally.” Even though the revenue results were better than expected, Goldman's shares lost some value yesterday before gaining 0.74% in today's pre-trading. Over the last three months, its shares still lost almost 9% their value. Goldman's arch-rival, Morgan Stanley MS, is also gaining some lost ground in today's pre-trading session. Its shares gained 1.34% today but were still 6% down over the last three months. The investors are worried after Morgan Stanley announced a humiliating $961 million loss at its Japanese joint venture with the largest Japanese bank, Mitsubishi UFJ Financial Group MTU, after placing wrong bets on Japan's long-term interest rates. The Q1 results, which are expected tomorrow, are not expected to impress anybody. Bank of America BAC, which owns Merrill Lynch (another US investment bank that stopped existing as a separate entity following the financial collapse of 2008), has had a difficult past three months after its shares tumbled 14%. JPMorgan Chase JPM seems to be the only US bank with connections to the “great five” of investment banking (JPMorgan acquired Bear Stearns in March 2008) to defy the downward market momentum as its shares grew 2% over the last 90 days. Unlike Goldman Sachs, JPMorgan published a second-best profit results during Q1. The investment bank brought in $2.4bn in net profits during the first quarter, mostly helped by record fees from debt underwriting of $971m, up 33% on last year, and a 41% increase in advisory fees, which rose to $429m. The British banks – Lloyds TSB LYG, Barclays BCS and Royal Bank of Scotland RBS – have all raced up on April 11, following an announcement by UK's Independent Commission on Banking, which required additional safeguards for the retail part of banks but has failed to ask for a complete separation of retail and investment (casino) banking. These gains evaporated in the following days, however. Today seems to be the new day for the British trio as well. Royal Bank of Scotland ended pre-trading at $13.65, up 0.22%. Lloyds TSB closely followed its rival after it share grew 0.26% to stand at $3.81. Barclays was the best performing Brit, however, with its shares rising 0.73% to 19.27.