💰 Goldman’s Golden Quarter: Goldman Sachs (GS) reported Q3 earnings of $5.47 per share, surpassing the expected $5.31. With revenue of $11.82 billion, the bank saw a 33% drop in profit to $2.058 billion. Bond trading revenue decreased by 6% to $3.38 billion, but equities trading revenue rose by 8% to $2.96 billion. Despite challenges, CEO David Solomon remained optimistic about the bank’s future.
🏦 BofA Beats Estimates: Bank of America’s (BAC) Q3 earnings stood at 90 cents per share, topping the anticipated 82 cents. The bank’s profit rose by 10% to $7.8 billion, with revenue growth of 2.9% to $25.32 billion. Interest income climbed by 4% to $14.4 billion, driven by higher rates and loan growth. Despite being poised to benefit from higher interest rates, the bank’s stock performance lagged behind its peers in 2023.
📉 Rate Sensitivity: Bank of America’s strategy during the COVID-19 pandemic led to an accumulation of low-yielding, long-dated securities. These securities depreciated as interest rates rose, making the bank more susceptible to the recent spike in the 10-year Treasury yield. This impacted the bank’s net interest income, a crucial metric for analysts.