America second

14 October 2020 By John Foley Follow @johnsfoley

Volatility boosted profit across Wall Street. While Goldman Sachs made the most of it, Brian Moynihan’s bank missed the updraft. Trading securities is a minor part of the giant U.S. lender’s business. But as banks wrestle with low interest rates, keeping up with the pack matters.

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Goldman Sachs reported $3.5 billion of earnings applicable to common shareholders for the third quarter of 2020, beating estimates of analysts polled by Refinitiv and nearly doubling from a year earlier thanks to growth in trading revenue and profit on equity investments.

Goldman’s markets revenue, which includes trading in stocks and bonds, increased by 29% year-on-year. The company also reported a $780 million gain from its publicly traded equity holdings, compared with a $270 million loss the same period a year earlier.

Bank of America reported $4.4 billion of earnings applicable to common shareholders for the second quarter, a 16% year-on-year decline. Net interest income fell as a result of lower rates, while trading revenue grew 4% compared with a year earlier.

The lender set aside $1.4 billion to cover loan losses, almost twice the previous year’s figure but below the $2 billion it booked in the preceding quarter.

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