Goldman Sachs Group, Inc. (GS) shares are trading lower in the pre-market on Tuesday after CEO David Solomon revealed that trading revenue is projected to decline by 10% in the third quarter. This anticipated dip is attributed to sluggish market conditions in August. Despite this, Solomon expressed a positive outlook on investment banking, noting improvement in the sector. He expects a rebound in private equity-led deals by the end of this year and into 2025.
In a strategic shift, Goldman Sachs is streamlining its consumer business. This includes selling loans to small and medium-sized businesses and withdrawing from a credit card partnership with General Motors. These decisions mark a continuation of the bank’s retreat from retail sectors, a move that began in late 2022. Solomon explained that these changes will have a pre-tax impact of approximately $400 million in the current quarter, primarily affecting revenue.
It’s worth noting that in July, Goldman Sachs reported a 17% year-over-year increase in sales, driven by higher net revenues in Global Banking and Markets, and Asset and Wealth Management. The company also surpassed earnings estimates, reporting GAAP EPS of $8.62 against a consensus of $8.35.
Furthermore, in August, the Wall Street Journal reported that Goldman Sachs is planning to cut over 1,300 employees from its global workforce as part of an annual review aimed at eliminating low performers.
For investors seeking exposure to Goldman Sachs, consider the iShares U.S. Broker-Dealers & Securities Exchanges ETF (IAI) and the Invesco KBW Bank ETF (KBWB).
As of the last check on Tuesday, GS shares were down 0.57% at $485.80 in the pre-market.
