Goldman Sachs’s earnings in the first quarter of the year have beaten estimates. The large bank managed to realize a profit of 2.25 billion USD despite the decline in its revenue.

Goldman Sachs (GS) Stock Price Today

The performance of different departments in the bank varied

The biggest increase for Goldman Sachs was in its advisory services department, which benefited from an uptrend in mergers and acquisitions. The department of institutional client services, on which Goldman relies heavily for revenue, saw a decline. At the same time, the bank’s equity and fixed income trading activities, and its investment banking activities, generated incoming cash flow that matched predictions.

The department of lending and investing saw a drop in its incoming cash flow, due to falling market value of held assets. The department of investment management was disappointing for analysts in particular. This was due to unfavorable investing conditions that impacted the fees of money managers and reduced money earned from transactions.

One factor behind the decline in Goldman Sachs’s gross revenue has been the higher losses on failed loans, following an expansion in lending activities by the bank to retail clients. The bank’s stock declined following the release of the figures.

The new CEO must address many challenges

Goldman’s CEO found the performance satisfactory in the current market conditions. However, the bank decided to offset the decline in its revenues by reducing payments to employees. Employees would now receive 3.25 billion USD instead of the expected 3.58 billion USD. Goldman had already laid off 2 percent of its staff earlier.

David M. Solomon

Chief Executive Officer of Goldman Sachs

The release of the earnings report came in after a period of many changes for the bank. It has recently entered a partnership with apple to release a joint credit card. Additionally, the current CEO, David Solomon, has only been in his position for six months. The recent performance of the bank is something that the CEO must answer for. As if that was not enough, the bank must also address a recent scandal in which a former partner of Goldman Sachs played a role in stealing money from a large investment fund.