Goldman Sachs CEO David Solomon warned that third-quarter results could carry a less favorable mix, with non-compensation expenses running roughly $500 million above the prior quarter. Speaking Wednesday at the Barclays Financial Services Conference, Solomon said the bank's equity business remains very strong while fixed income, currencies and commodities has been a little bit softer on a relative basis. Several one-off factors are complicating the quarter, including a more muted contribution from investments after unusually strong activity in the second quarter, higher non-compensation transaction costs from elevated business activity and accelerated technology spending, and several years of charitable giving pulled forward in a very, very tax-efficient way. Loan-loss provisions should also be slightly higher than a year ago because of idiosyncratic factors. Solomon said corporate CEO confidence is high and noted that S&P 500 earnings growth is running about 30% above expectations from the start of the year, and he believes roughly 6% revenue growth could translate into more than 10% earnings growth as technology improves efficiency and operating leverage.
Goldman Sachs Group IncCEO Solomon warned Q3 non-compensation expenses will run ~$500M above the prior quarter, pressuring results.
Barclays PLC