Wall Street banks finished their reporting for Q1 “earnings” with Goldman Sachs reporting Monday.
While the TV financial commenters said it was a tough quarter, they proudly stated that the large banks “beat” estimates and yada, yada, yada.
Give me a break. The average profit decline for the quarter was down over 30% year-over-year for the largest institutional firms. Goldman was down 60%.
A beat on the bottom line — due to severely reduced expectations — was cause for celebration as the bank stocks ran higher.
Each firm is slashing staff from the trading desks to back-office support as the mid-level European banks pare back their US staff.
While Goldman shares are down 9.8% this year, despite the 2.2% rise Monday after the earnings announcement, these 2016 share-price losses are playing out across the banking sector. Trading revenue in stocks and bonds is scrapping the bottom at these firms.
Bank profits cratered for the quarter on a pull back in Merger and Acquisitions and trading volumes.
The one area where profits rose for most Wall Street banks were fees and charges on retail banking customers. JPMorgan Chase, Wells Fargo and Bank of America all saw revenue from customer fees charged increase year-over-year.
Is it any wonder why Goldman Sachs rolled out a consumer banking arm this week. While the bank said it wished to diversify its cash base, it also is looking at getting into a very important revenue generator it did not have prior.