Goldman Sachs (GS) Shares Down Despite Strong Quarterly Performance

Goldman Sachs Group Inc. (NYSE:GS), founded in 1869 by Marcus Goldman, is regarded as one of the most prestigious investment banks in the U.S. It offers a wide range of financial services to a diversified customer base. However, Goldman is mainly an investment bank and its consumer banking operations are limited as compared to its peers.

CEO David Solomon, after taking charge of the bank in 2018, has been trying to diversify Goldman’s portfolio to reduce its dependence on trading and investment banking. Under his leadership, the bank has been making efforts to boost its presence in more predictable segments such as consumer banking and cash management.

The banking industry was among the hardest hit industries from the Covid-19 crisis. Yet, Goldman outperformed its peers and performed well in terms of overall growth during the pandemic mainly due to its smaller loan portfolio. Overall, GS shares rose around 20 percent during 2020. Meanwhile, the bank inked key deals with General Motors (GM) and Mastercard (MA) last year to develop credit card products.

Goldman stock has gained about 12 percent so far this year. The bank on Tuesday announced better-than-expected financial results for the fourth quarter, mainly driven by strong growth across its trading business. Moreover, its investment banking unit also performed well amid a series of IPOs during the quarter.

The bank reported earnings of $4.51 billion, or $12.08 per share for the three-month period ended December 31, significantly higher than $4.69 per share in the comparable period of 2019. Analysts on average were looking for a profit of $7.45 per share.

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Revenue for the fourth quarter jumped 17.9 percent on a year-over-year basis to $11.74 billion, easily beating the consensus forecast of $9.99 billion. Goldman shares slipped around 1 percent in the mid-day trading Tuesday despite reporting the upbeat quarterly performance.