Goldman Sachs is still the king of Wall Street — even though the investment banking powerhouse reported a slight drop in revenue and profit for the second quarter compared to a year ago.
The slight declines were not as bad as investors had expected. Goldman Sachs can continue to boast that it’s the top bank for merger advisory work and advising companies on initial public offerings.
Wall Street cheered the news, sending shares of Goldman Sachs up about 2% in early trading. Citigroup, JPMorgan Chase and Wells Fargo all also reported stronger-than-expected results in the past two days.
It looks like Goldman Sachs may not be hurt as much as other big banks by low interest rates, which could dent lending profit margins. CEO David Solomon also shrugged off worries about the US multi-front trade wars, as well as concerns about a slowdown in China and economic weakness in Europe.
“We’re encouraged by the results for the first half of the year as we continue to invest in new businesses and growth to serve a broader array of clients,” Solomon said in a press release Tuesday. “Given the strength of our client franchise, we are well positioned to benefit from a growing global economy.”
But the slowdown in revenue and profit is hitting Goldman Sachs employees. The company said compensation and benefits expenses — the so-called bonus pool — fell 2% from a year ago. Goldman’s headcount rose 3% over the same period.
The average compensation per employee in the quarter was about $93,174 for the quarter, compared to $98,121 in the second quarter of 2018.
