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The Goldman Sachs Group, Inc. (NYSE: GS) reported robust financial results for the second quarter of 2024. The company achieved net revenues of $12.73 billion, a 17% increase from the $10.89 billion reported in the second quarter of 2023. However, this figure represents a 10% decline from the first quarter of 2024, where net revenues stood at $14.21 billion.

Net earnings for Q2 2024 were $3.04 billion, a significant improvement from the $1.22 billion recorded in the same period last year but a 26% decrease from Q1 2024’s $4.13 billion. Diluted earnings per share (EPS) for the quarter were $8.62, a notable increase from the $3.08 EPS reported in Q2 2023.

However, it is lower than the $11.58 EPS achieved in the first quarter of 2024. The annualized return on average common shareholders’ equity (ROE) was 10.9% for Q2 2024, while the annualized return on average tangible common shareholders’ equity (ROTE) stood at 11.6%. The firm’s book value per share increased by 1.9% during the quarter to $327.13.
 

Goldman Beats Market Expectations in Q2 2024

Goldman Sachs exceeded market expectations for the second quarter of 2024. Analysts had anticipated an EPS of $8.36 and revenue of $12.35 billion. The actual EPS of $8.62 surpassed these expectations by $0.26. Similarly, the net revenues of $12.73 billion exceeded the forecast by $0.38 billion.

This outperformance can be attributed to strong performances in Global Banking & Markets and Asset & Wealth Management. The Global Banking & Markets division generated net revenues of $8.18 billion, driven by robust performance in Equities and fixed income, currency, and commodities (FICC) financing.

This division’s performance was 14% higher than Q2 2023 but 16% lower than Q1 2024. The Asset & Wealth Management division also saw a 27% increase in net revenues compared to Q2 2023, reaching $3.88 billion. Record quarterly management fees and net gains in equity investments fueled this growth.
 

Goldman Sachs Increases Dividend to $3.00 per Common Share

Looking ahead, Goldman Sachs has provided optimistic guidance for the remainder of 2024. The firm has increased its quarterly dividend to $3.00 per common share, up from $2.75. This 9% increase will be effective from the third quarter of 2024, reflecting the firm’s confidence in its ongoing financial health and future profitability.

The company’s Board of Directors approved this dividend increase on July 12, 2024, and it will be paid on September 27, 2024, to shareholders of record as of August 30, 2024. Goldman Sachs also highlighted its strong capital return to shareholders during the quarter, repurchasing $3.50 billion worth of common shares and paying $929 million in common stock dividends.

The firm’s global core liquid assets averaged $424 billion for Q2 2024, indicating a stable liquidity position. This financial strength positions Goldman Sachs well to navigate the complexities of the current economic environment and to capitalize on future opportunities.

The firm’s effective income tax rate for the first half of 2024 was 21.6%, slightly up from 21.1% in the first quarter of the year. This increase was primarily due to a decrease in the impact of permanent tax benefits. Moreover, Goldman Sachs continues to lead in the global financial space, ranking #1 in worldwide announced and completed mergers and acquisitions for the year-to-date period.

Operating expenses for Q2 2024 were $8.53 billion, remaining essentially unchanged compared to both Q2 2023 and Q1 2024. The firm’s efficiency ratio for the first half of 2024 improved to 63.8%, down from 73.3% in the first half of 2023. This improvement reflects the firm’s ongoing efforts to manage costs effectively while maintaining robust operational performance.

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