Goldman Sachs’ second quarter profit up 44%; CEO Blankfein to retire

In this Dec. 13, 2016, file photo, the logo for Goldman Sachs appears above a trading post on the floor of the New York Stock Exchange. (AP Photo/Richard Drew, File)
Updated 18 July 2018
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Goldman Sachs’ second quarter profit up 44%; CEO Blankfein to retire

  • The New York-based bank said Tuesday that earnings reached $2.35 billion in the second quarter
  • Nearly all of Goldman’s businesses saw double-digit growth in the second quarter

NEW YORK: Goldman Sachs’ profits jumped 44 percent in the second quarter compared with a year ago, driven by the investment bank’s core franchises: advising companies on mergers, acquisitions and other deals, and its trading business.
The New York-based bank said Tuesday that earnings reached $2.35 billion in the second quarter, compared with $1.63 billion a year earlier. On a per-share basis, Goldman earned $5.98 a share, compared with $3.95 a share a year earlier, beating analysts’ forecasts of $4.65 a share.
Separately, Goldman said Chief Executive Officer Lloyd Blankfein will retire as of Oct. 1, and be replaced by David Solomon, the president and chief operating officer. Blankfein has been CEO since 2006.
Nearly all of Goldman’s businesses saw double-digit growth in the second quarter. Trading was particularly strong. Goldman’s institutional client services division, which contains the firm’s trading operations, posted net revenues of $3.57 billion in the quarter, up 17 percent from a year earlier.
Goldman’s trading performance can be fickle, driven by whether the market was volatile that quarter and whether the right sort of securities saw the right sort of movement. Like its competitor Morgan Stanley, which will report results Wednesday, Goldman has been looking to diversify its businesses, moving in recent years into consumer lending and consumer banking.
Goldman’s investment banking business also had a solid quarter, posting net revenues of $2.05 billion, which is up 18 percent from a year earlier. The firm saw both higher underwriting revenue, as well as revenue for advisory services.
The firm’s return on equity ratio, a closely watched performance gauge for banks like Goldman Sachs which measures how much money the bank earned with the money investors have lent it, was 12.8 percent in the quarter. Banks like Goldman try to keep that figure above 10 percent.
Company-wide net revenues were $9.4 billion in the quarter, also beating analysts’ expectations.
Goldman shares fell 0.8 percent to $229.25 in premarket trading.


UAE’s Network International shrugs off Brexit to list shares in London

Updated 21 March 2019
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UAE’s Network International shrugs off Brexit to list shares in London

  • The planned share sale comes at an uncertain time in the UK
  • The company, which operates hospitals in the Middle East, was said to be also considering listing in the US or Singapore

DUBAI: Network International, the UAE payments processor, has committed to a London IPO next month in what would be the UK’s first big share sale of the year.
The company intends to have a free float of at least 25 percent and admission to the London Stock Exchange is expected to take place in April, Network International said in a regulatory filing on Thursday.
The planned share sale comes at an uncertain time in the UK where there is still no clarity around whether Britain will leave the EU or not at the end of the month.
VPS Healthcare, the Abu Dhabi-based hospital operator, is reconsidering plans to list in London due to uncertainty surrounding Brexit, Bloomberg reported on Thursday citing a person familiar with the matter.
The company, which operates hospitals in the Middle East, was said to be also considering listing in the US or Singapore.
Emirates NBD, Dubai’s biggest bank, owns 51 percent of Network International while Warburg Pincus and General Atlantic jointly own the rest.
The share sale will be a key test of investor demand for new listings in London after a subdued 2018 across most European markets.
“Volatility has continued in recent months, driven by the uncertainty around trade between the US and China, the wider geopolitical climate and the potential end of the current bull run,” said Peter Whelan, partner and UK IPO Lead at PwC in a recent report.
“We are seeing a healthy number of companies preparing for an IPO in 2019 despite the ongoing Brexit negotiations which have clearly impacted IPO activity on the London market.”
The payment processor reported earnings of $298 million last year according to its website, up from $262 million a year earlier. It does not disclose net income figures.
The company handles digital payments across the Middle East, which generate three quarters of its total earnings.
Last year it processed some $40 billion in payments for more than 65,000 merchants.
Its key markets in the region include the UAE and Jordan it says that Saudi Arabia offers “significant opportunities.” It also offers services in 40 African countries with Egypt, Nigeria and South Africa being its most important segments on the continent.