GS 1Q24 Results Positive: FICC Reads Well For BARC, DBK And BAC

Goldman Sachs 1Q24 results beat on a very strong revenue result, especially in FICC which reads well for Deutsche, Barclays and BoA. The IB backlog is lower which is, however, a weaker outlook indicator but this looks, overall, a spread positive event.

(GS US)(BARC LN)(DBK GY)(BAC US)

• Key credit metrics: CET1 ratio is 100bp better than Dec-23 (15.9% vs. 14.9%), reportedly driven by a drop in RWAs but without explanation, as yet. Average dVaR is down across products (USD87m from 91m in 4Q23) and, much as there’s an increase in card charge-offs, that’s an exit portfolio now, really.
• Operationally, revenues are much better in the IB than JPM and Citi which reported on Friday. FICC is especially positive, so a good read-through to Barclays and Deutsche, we feel. In GSAM, mgmt fees are strong but there are questions around the investing business. Debt investments (private credit is in here) have gone backwards and, within equity, the PE book is much stronger than public equities, which appears incongruous.
• Outlook: this is a bumper revenue quarter and the new highpoint for IB revenues. We can see this being taken positively across the remaining peers. There’s only one outlook hint otherwise and it indicates the investment banking backlog is lower, which is a muted signal. More questions on the call, we feel.