The Goldman Sachs Group, Inc. GS shares are trading lower premarket Tuesday. On Monday, the company’s CEO, David Solomon, reportedly stated that trading revenue will likely fall by 10% in the third quarter due to sluggish conditions last month.
However, Solomon noted that investment banking is improving, although activity from financial sponsors hasn’t rebounded as expected. He remains optimistic that private equity-led deals will recover by the end of this year and into 2025, reported Reuters.
According to Solomon, Goldman Sachs is narrowing its focus on the consumer business. The CEO highlighted the bank’s sale of loans to small and medium-sized businesses and its plan to exit a credit card partnership with General Motors as examples of its retreat from retail sectors, a strategy that started in late 2022.
Solomon said, “The combination of those things this quarter will likely have an approximately $400 million pre-tax impact, largely showing up in revenues.”
In July, the bank reported sales increased 17% Y/Y, reflecting higher net revenues in Global Banking and markets and Asset and wealth Management. Also, the U.S. financial services giant reported GAAP EPS of $8.62, beating the consensus of $8.35.
Goldman Sachs plans to cut over 1,300 employees from its global workforce in an annual review to eliminate low performers, WSJ reported in August.
Investors can gain exposure to the stock via iShares U.S. Broker-Dealers & Securities Exchanges ETF IAI and Invesco KBW Bank ETF KBWB.
Price Action: GS shares are down 0.57% at $485.80 premarket at the last check Tuesday.
Photo via Shutterstock
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