Given all the noise around the poor performance of its fixed income, currencies and commodities division in the first half of the year – and, in particular, the hit on commodity inventory in the second quarter – it almost comes as a surprise to see how well Goldman Sachs performed overall in 2017, heading into the final quarter of the year.
In the first nine months of 2017, it grew revenues by $1.8 billion to $24.2 billion, an increase of 8% over the first three quarters of 2016.
Goldman has been cutting operating expenses, allowing senior people to leave from the partner and managing director ranks, hiring more associates and analysts, while growing back-office headcount in cities like Bengaluru in India, Warsaw and Salt Lake City.
CEO Lloyd Blankfein now regularly visits these so-called strategic cities, recently spending time happy times in Paris and Frankfurt.
Expenses grew at only half the rate of revenues in the first nine months. With the share count down following buybacks, the firm achieved a 160-basis point increase in return on equity, up to 10.3% from 8.7%