Two leading U.S. banks, Goldman Sachs Group Inc (NYSE:GS) and JPMorgan Chase & Co. (NYSE:JPM), reported their fiscal second-quarter earnings on Tuesday, July 15. While Goldman Sachs reported a 5% rise in profits, JPMorgan saw an 8% decline in its Q2 earnings. Surprisingly, JPMorgan shares rose 2.77% to $57.85 in pre-market trading Tuesday. Let’s have a detailed look at quarterly results of each bank.
Goldman Sachs Q2 results
Shares of the New York-based banking giant jumped 1.92% to $170.20 in pre-market trading Tuesday after the company reported its Q2 results. Goldman Sachs posted net earnings of $2.04 billion or $4.10 per share, up 5% from $3.70 a share in the same quarter last year. Analysts polled by Bloomberg were expecting $3.09 in earnings. Net revenues came in at $9.13 billion, driven by solid growth in lending and investing businesses.
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Revenues from investment banking rose 15% YoY to $1.78 billion. Financial advisory revenues rose slightly to $506 million. Underwriting business generated $1.28 billion in revenues, up 20% from last year. The investment management business generated a record management and other fees of $1.20 billion. For the quarter ended Jun 30, investing & lending business revenues soared 46% to $2.07 billion. However, not everything was shiny. Revenues from the institutional client services fell 11% YoY to $3.83 billion.
JPMorgan earnings beat estimates
Though the banking giant’s earnings declined 8% during the June quarter, it still managed to beat the consensus estimates. The fall in its earnings is a sign that a pullback in trading of currencies and bonds by large institutions hurt its securities trading business. Its earnings were also hit by a slowdown in mortgage lending.
JPMorgan earned $5.99 billion or $1.46 per share, down from $6.5 billion or $1.60 a share in the same quarter last year. Analysts polled by Thomson Reuters were expecting $1.29 per share in earnings. Net revenues came in at $25.3 billion, well above the consensus estimate of $23.76 billion. Revenues from fixed income and equity markets plunged 15% YoY to $3.5 billion.
JPMorgan said profits from its mortgage unit fell 38% to $709 million. Mortgage application volumes also witnessed a decline of 54% to $30.1 billion. Revenues from private banking gained 5% to $1.6 billion. The bank’s total client assets rose 15% to $2.5 trillion.