More insight is emerging into the state of investment banking in Australia, with Goldman Sachs and Morgan Stanley among the latest Wall Street banks to lodge their local accounts.
Goldman Sachs Australia reported a substantial dive in its profit after tax to $6.3m for the year to December, compared to $48.5m in 2022 as it joined other industry peers feeling the heat from limited deal flow.
Revenue for Goldman Sachs Australia declined to $152.7m from $241.5m in the previous year, with its corporate advisory income at $94m compared to $177.8m in the previous year, and its commission and brokerage income at $57m compared to $61.9m in 2022.
It issued $112m of capital, in line with 2022.
Meanwhile, its Wall Street rival Morgan Stanley generated $41.1m in profit after tax in Australia for 2023 compared to $54m in the previous year.
Its fee and commission income fell to $26.3m from $32.8m in 2022.
Morgan Stanley and Goldman Sachs are among the Wall Street banks that have trimmed their workforces locally as part of a move by head offices to cut thousands of jobs worldwide.
For the fourth quarter, globally, Morgan Stanley reported a 32 per cent fall in its earnings, hit by one-time charges.
Goldman Sachs reported a 51 per cent lift in fourth quarter profit.
It followed eight quarters of decline, and the lift came from asset and wealth management.
It is now the bank’s focus in a quest by boss David Solomon to build resilience to the firm’s earnings rather than rely on the traditional powerhouses of investment banking and trading.
Still, Goldman did worse than its peers in investment banking for the fourth quarter, despite signs of improving market conditions, according to reports from the Wall Street Journal.
Its revenue in the US fell 12 per cent, while rivals including Morgan Stanley posted gains.
Goldman’s trading revenue was down 3 per cent, also worse than most rivals.
Goldman Sachs’ global profit fell 24 per cent to $US8.52bn for the year as revenue declined 2 per cent to $US46.25bn.
According to LSEG Data and Analytics, Goldman Sachs finished in ninth place for investment banking fees in 2023.
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