The US firm reported its second-quarter financial results, including details on the performance of its wealth management business.

Goldman Sachs said yesterday that net revenues were $10.90 billion for the second quarter of 2023, slipping by 8 per cent from the second quarter of 2022 and 11 per cent lower than the first quarter of 2023.

The year-on-year revenue fall was caused by lower net revenues in global banking and markets and slightly weaker net revenues in the wealth and asset management businesses. This was partly offset by higher net revenues in the Platform Solutions business.

In the wealth and asset management division, net revenues were $3.05 billion for the second quarter of 2023, falling 4 per cent from a year ago. The year-on-year fall reflected “significantly higher” net losses in equity investments, significantly lower Incentive fees and significantly lower net revenues in debt investments, partially offset by significantly higher net revenues in private banking and lending and slightly higher management and other fees.

The gains in private banking and lending net revenues were born mainly from the impact of higher deposit spreads and balances, and the gain of about $100 million linked to the sale of substantially all the remaining Marcus loans portfolio. (Last week, Goldman Sachs said it sold $1 billion of personal loans from its consumer unit, Marcus, to alternative investment firm Varde Partners. This was the second tranche of unsecured loans offloaded by Goldman after it disclosed earlier that it had sold about $1 billion from the $4.5 billion loan portfolio in the first quarter.)

Provision for credit losses was $615 million for the second quarter of 2023, compared with a provision of $667 million for the second quarter of 2022 and a net benefit of $171 million for the first quarter of 2023, the US firm said. Provisions for the second quarter of 2023 reflected net provisions related to the credit card and point-of-sale loan portfolios, driven by net charge-offs and growth, and individual impairments on wholesale loans, partially offset by a reserve reduction related to the repayment of a term deposit with First Republic Bank. 

Operating costs were $8.54 billion for the second quarter of 2023, 12 per cent higher than the second quarter of 2022 and 2 per cent higher than the first quarter of 2023. The firm’s efficiency ratio was 73.3 per cent for the first half of 2023, compared with 62 per cent for the first half of 2022, it said.