Goldman Sachs chief executive David Solomon said the bank’s third-quarter fixed-income, currencies and commodities business was performing relatively more softly than in the comparable period. He made the comments at the Barclays Global Financial Services Conference on 16 September. Equities trading remained strong, according to reports of his remarks. The comments were an outlook update, not completed quarterly results.
Reuters reported that Goldman expected its investment portfolio’s contribution to be much more muted than in the second quarter. Solomon also indicated that non-compensation expenses would be about $500 million higher than in the preceding quarter. The bank’s official event page confirmed his participation and highlighted that the presentation contained forward-looking statements. The Wall Street Journal separately reported the softer fixed-income outlook.
TRADING MIX SHIFTS BEFORE RESULTS
The contrasting indications for fixed-income and equities point to an uneven trading quarter. They do not establish the final revenue contribution from either business because the reporting period had not ended when Solomon spoke. Market conditions and client activity during the remaining days could still affect the outcome.
Goldman also expected provisions to edge higher, Reuters reported. Higher non-compensation costs would add pressure to the quarter even if the strength in equities continued. The comments gave investors an updated set of management expectations without replacing the bank’s formal financial statements.
FORMAL RESULTS REMAIN THE TEST
The update is material because trading revenue and expenses can move sharply between quarters at investment banks. Goldman’s guidance suggests that business-line performance and costs may diverge rather than move uniformly. Comparisons with the second quarter will therefore require attention to the composition of revenue as well as the overall total.
The next milestone is Goldman Sachs’ third-quarter earnings release, when the bank will report completed revenue, provisions and expenses. Those figures will show whether the softer fixed-income activity and higher cost expectation persisted through the period. Until then, the conference comments remain management guidance rather than realised results.