GS: Mgmt Keen Not To Ramp Consensus; Laterals Still Positive For BARC, DBK, BAC

Goldman conf call has just finished and three key operational takeaways which is basically guidance not to get too excited about these positive results, in our view. Mgmt were pushed on raising equity payouts again but demurred. We should see this as at least a minor credit positive after the call. Still, these results are a good sign for Deutsche, Barclays and BoA.

• Private credit: mgmt indicated that this is something of a secular growth area and really only an extension of the previous syndicated alternatives lending business, rather than another reason to be fearful.
• Broad re-opening of capital markets: by this, we feel mgmt was alluding to ECM and M&A activity moving back towards more “normal” run rates.The guidance was simply that normalisation is likely to happen at some point.
• Outlook: the term “peak” was mentioned on the call, referring to the returns generated in the IB in the quarter and our sense is that mgmt felt it was a bumper quarter and that expectations at these levels, especially with VaR flat, are unwarranted. In short, don’t get too excited.