Goldman Sachs Clocks Mixed Q1 Performance, Investment Banking Falls 26%, Sees Net Gain In Credit Losses Provision

Goldman Sachs Inc GS reported Q1 net revenues of $12.22 billion, down 5% Y/Y, missing the consensus estimate of $12.79 billion.

Global Banking & Markets net revenues fell 16% Y/Y to $8.44 billion on lower investment banking fees (-26% Y/Y) and Fixed Income, Currency and Commodities (-17% Y/Y) and Equities (-7% Y/Y) revenues.

The company witnessed a significant decline in Advisory revenues owing to considerably lower industry-wide completed mergers and acquisitions deals.

Asset & Wealth Management net revenues were up 24% Y/Y to $3.22 billion, led by recognition of net gains in Equity investments, higher Management and other fees, and Debt investments revenues.

Platform Solutions Revenue rose 110% Y/Y to $564 million on significantly higher average credit card balances. 

Provision for credit losses was a net benefit of $171 million in Q1, compared with net provisions of $561 million a year ago, benefiting from a reserve reduction of around $440 million related to a partial sale of the Marcus loans portfolio and the transfer of remaining portfolio to be held for sale.

Total operating expenses rose 9% Y/Y to $8.40 billion, owing to impairments recognition of around $355 million related to consolidated real estate investments, the inclusion of NN Investment Partners, and increased technology and transaction-based expenditures.

EPS of $8.79 beat the consensus estimate of $8.10.

In Q1, GS repurchased shares worth $2.55 billion and paid $868 million of common stock dividends. The company's global core liquid assets averaged $399 billion at the end of Q1 2023.

GS's headcount decreased by 6% compared to end-2022 on the job cut initiative in Q1. The company's assets under supervision increased to $2.67 trillion compared to $2.39 trillion a year ago.

Price Action: GS shares are trading lower by 3.44% at $328.00 premarket on the last check Tuesday