A roundup of bank earnings: trouble with fixed income

January 16, 2014

Goldman Sachs reported fourth quarter earnings of $2.33 billion on Thursday morning. Reuters reports that the result is a 21% drop from the same quarter in 2012,as “bank was stung by its heavy reliance on the bond market, which historically has been a source of great profit.” Fixed income, currencies and commodities revenues dropped 15% in the quarter.

Despite the declines relative to last year, Goldman’s results were better than what research analysts were expecting. The below chart from Reuters’ Stephen Culp shows the so-called surprise, or difference between analyst estimates and actual results, as well as Goldman’s stock recent performance compared to the S&P 500, and its fourth quarter revenue by business unit:

JP Morgan, Citigroup and Bank of America also reported earnings earlier this week. Below, Reuters charts these banks’ share price performance, and how the banks did relative to estimates. Citibank saw a 15% drop in fixed income revenue. At, JPMorgan fixed income revenue was flat, while at Bank of America trading in that sector jumped %16.

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