Summary
Goldman Sachs Group, Inc. (GS) reported a strong second quarter and first half of 2018, demonstrating significant year-over-year improvements in key financial metrics. For the three months ended June 2018, net earnings rose 40% to $2.57 billion, with diluted EPS increasing 51% to $5.98. This performance was driven by robust net revenue growth of 19% across all business segments, notably in Institutional Client Services due to strong Fixed Income, Currency and Commodities (FICC) Client Execution, and in Investing & Lending, bolstered by higher net interest income and gains from equity securities. For the six months ended June 2018, net earnings increased 32% to $5.40 billion, with diluted EPS up 42% to $12.93, reflecting a 22% increase in net revenues across all segments. Operating expenses also increased by 14% and 17% for the respective periods, primarily due to higher non-compensation expenses, including provisions for litigation and regulatory proceedings, and investments in growth. Despite rising expenses, the firm maintained healthy profitability with an annualized Return on Average Common Shareholders' Equity (ROE) of 12.8% for Q2 2018, up from 8.7% in the prior year. Capital ratios remained strong, with the Common Equity Tier 1 (CET1) ratio at 12.6% under the Standardized approach as of June 2018.
Financial Highlights
36 data points| Interest Expense | $3.92B |
| Net Income | $2.56B |
| EPS (Basic) | $6.04 |
| EPS (Diluted) | $5.98 |
| Shares Outstanding (Basic) | 387.80M |
| Shares Outstanding (Diluted) | 392.60M |
Key Highlights
- 1Net earnings for Q2 2018 increased 40% year-over-year to $2.57 billion, with diluted EPS up 51% to $5.98.
- 2Net revenues grew 19% to $9.40 billion in Q2 2018, driven by strong performance across all business segments, particularly Institutional Client Services and Investing & Lending.
- 3For the first half of 2018, net earnings were $5.40 billion, a 32% increase year-over-year, with diluted EPS up 42% to $12.93.
- 4Annualized Return on Average Common Shareholders' Equity (ROE) improved to 12.8% in Q2 2018 from 8.7% in Q2 2017.
- 5Operating expenses increased by 14% in Q2 2018, driven by higher non-compensation expenses including litigation provisions and growth investments.
- 6Common Equity Tier 1 (CET1) ratio remained strong at 12.6% (Standardized approach) as of June 2018.
- 7Book value per common share increased 4.1% from the prior quarter to $194.37 as of June 2018.