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Goldman Sachs reports third quarter earnings per common share of $14.93

By Hemanth on Oct 15, 2021 | 04:35 AM IST

Picture credit: The Economic Time

The Goldman Sachs Group, Inc. (NYSE: GS) today reported net revenues of $13.61 billion and net earnings of $5.38 billion for the third quarter ended September 30, 2021. Net revenues were $46.70 billion and net earnings were $17.70 billion for the first nine months of 2021.

Diluted earnings per common share (EPS) was$14.93 for the third quarter of 2021 compared with $8.98 for the third quarter of 2020 and $15.02 for the second quarter of 2021, and was $48.59 for the first nine months of 2021 compared with $12.65 for the first nine months of 2020. In the prior year, net provisions for litigation and regulatory proceedings reduced diluted EPS by $9.46 for the first nine months of 2020.

Annualized return on average common shareholders’ equity (ROE)1 was 22.5% for the third quarter of 2021 and 25.7% for the first nine months of 2021. Annualized return on average tangible common shareholders’ equity (ROTE)1 was 23.8% for the third quarter of 2021 and 27.2% for the first nine months of 2021.


Highlights:

Results in the third quarter of 2021 evidenced continued strong overall performance with net revenues of $13.61 billion, 26% higher than the third quarter of 2020.

In the first nine months of 2021, the firm generated net revenues of $46.70 billion, net earnings of $17.70 billion and diluted EPS of $48.59, each surpassing the previous full year records.

Investment Banking generated its second highest quarterly net revenues of $3.70 billion, reflecting record quarterly net revenues in Financial advisory and continued strength in Underwriting.

The firm remained ranked #1 in worldwide announced and completed mergers and acquisitions, and in worldwide equity and equity-related offerings, common stock offerings, and initial public offerings for the year-to-date.2

Global Markets generated quarterly net revenues of $5.61 billion, primarily reflecting strong performance in Equities, including record Equities financing net revenues, and the second highest Fixed Income, Currency and Commodities (FICC) financing net revenues.

Consumer & Wealth Management produced quarterly net revenues of over $2 billion for the first time, 35% higher than the third quarter of 2020.

Firmwide assets under supervision3,4increased $67 billion during the quarter, including long-term net inflows of $49 billion, to a record $2.37 trillion. Firmwide Management and other fees were a record $1.95 billion for the third quarter of 2021.

Book value per common share increased by 4.7% during the quarter and 17.4% during the first nine months of 2021 to $277.25.

During the third quarter of 2021, the firm announced the acquisitions of NN Investment Partners and GreenSky, Inc., to accelerate the firm’s strategy to drive higher, more durable returns. Both are expected to close by the end of the first quarter of 2022.


Net revenues were $13.61 billion for the third quarter of 2021, 26% higher than the third quarter of 2020 and 12% lower than the second quarter of 2021. The increase compared with the third quarter of 2020 reflected significantly higher net revenues in Investment Banking, Global Markets and Consumer & Wealth Management, partially offset by lower net revenues in Asset Management.

Operating expenses were $6.59 billion for the third quarter of 2021, 6% higher than the third quarter of 2020 and 24% lower than the second quarter of 2021. The firm’s efficiency ratio3 for the first nine months of 2021 was 52.8%, compared with 70.3% for the first nine months of 2020.

The effective income tax rate for the first nine months of 2021 increased to 19.6% from 18.8% for the first half of 2021, primarily due to a decrease in the impact of tax benefits and changes in the geographic mix of earnings.


Other Matters:

◾ On October 13, 2021, the Board of Directors of The Goldman Sachs Group, Inc. declared a dividend of $2.00 per common share to be paid on December 30, 2021 to common shareholders of record on December 2, 2021.

◾ During the quarter, the firm returned $1.70 billion of capital to common shareholders, including $1.00 billion of common share repurchases (2.5 million shares at an average cost of $395.28) and $700 million of common stock dividends.3

◾ Global core liquid assets3 averaged $356 billion4 for the third quarter of 2021, compared with an average of $329 billion for the second quarter of 2021.

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