Bank of America and Goldman Sachs reported third quarter profits this week, with vastly different results. BofA, the nation’s second largest bank, reported a 10% increase in profits over the same period in 2022. Meanwhile, Goldman saw profits drop by roughly 33% compared to the third quarter of last year.
BofA third quarter profits
For Bank of America, the profit report is undoubtedly a welcome relief. Throughout 2023, many investors have watched the bank closely, as its performance has trailed its large rivals. Moreover, despite this positive news, there are still concerns about billons in debt security losses that BofA has incurred since the earliest days of the Covid pandemic.
Still, this latest news saw increases in the company’s earnings, revenue, and net interest income. Additionally, the report suggests that dealmaking may be picking up as the bank’s investment banking and trading revenues saw a noticeable increase.
Goldman’s losses
Meanwhile, Goldman Sachs’s struggles have been largely attributed to its move away from consumer banking. The bank’s earnings fell from $3.07 billion during the third quarter of 2022 to $2.06 billion last quarter. Much of that decline was related to the Greensky write-down and $358 million in depreciated real estate investments.
Goldman’s earnings were an increase from the second quarter results. However, that success is tempered by the fact that the previous quarter’s earnings were the lowest the company had reported in more than three years. Nevertheless, the firm’s investment fee earnings did see an increase of 1% from 2022.
Other banking peers also saw increased third quarter profits. Those banks include Citigroup, Wells Fargo, and JPMorgan Chase. The stock market reacted to the latest profit news as one might expect. Traders sent Goldman’s stock price into retreat as it fell 1.6% in Tuesday’s trading. Conversely, the markets rewarded Bank of America with a stock price increase of 2.3%.
