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How does Goldman Sachs really compare to its US investment banking rivals?

How good is Goldman Sachs really? 13 charts to help you decide

The crown is looking wonky

Goldman Sachs' first quarter results are out. They're not exactly the greatest. While J.P. Morgan bankers allegedly have nothing to fear (according to Jamie Dimon), Goldman's staff have plenty to get worried about - not least the fact that a 13% increase in headcount since 2012 has prompted a 46% reduction in average pay as the bank pursues its policy of hiring juniors and recruiting in low cost overseas locations.

For the moment, debt capital markets (DCM) looks like the place to be at Goldman. The bank's fixed income sales and trading business had a horrible quarter, comparable with Morgan Stanley's, which begs the question whether the firm's fixed income trading business is too small to thrive in a world where the winner's take all.

Equity sales and trading looks tiny at Goldman, although is possibly deceptive as we've only included the bank's equities execution revenues and left out commissions and fees and securities services (which other banks don't necessarily include either).

Chart 11 underscores the extent to which Goldman really needs to cut costs after this quarter. - Something which Bloomberg says it's busy doing already, while chart 13 suggests any cost cutting is bound to fall disproportionately upon pay.

Does Goldman Sachs deserve its crown? You decide.

1. Among US investment banks, Goldman Sachs was the market leader in M&A revenues in the first quarter...

2. But Goldman's M&A business seems to be losing market share to Morgan Stanley and J.P. Morgan's...

3. Goldman's equity capital markets (ECM) business looks middling compared to J.P. Morgan's and Citi's...

4. And, ECM at Goldman just had a truly dreadful quarter...

5. Goldman's debt capital markets (DCM) business looks small compared to Citi's...

6. But while DCM revenues at every other bank fell in the first quarter, at Goldman they rose by 24%...

7. Goldman's much vaunted fixed income currencies and commodities (FICC) trading business is tiny. Only Morgan Stanley's was smaller in the first quarter...

8. And Goldman's FICC business had a worse first quarter than any other bank but Morgan Stanley's...

9. Meanwhile, Goldman's equities sales and trading business looks tiny...

10. And, it looks like Goldman's equities business had a dreadful start to the year

11. The cost/revenue ratio at Goldman Sachs (as a whole) doesn't look too great - compared to other banks' investment banking unit, only Morgan Stanley's was higher

12. But Goldman Sachs just keeps on hiring...

13. Although, pay per head just plummeted

Photo credit: King Saxon/pdanner/thinkstock

AUTHORSarah Butcher Global Editor
  • Mr
    Mr Man
    20 April 2016

    The Fix Inc rev graph stands out. But no one is saying or pointing out that last year the whole Street just had a crazy Q1.
    I know people love to talk about results in comparison to last year. But I would be curious how it compares to say 2013/2014 instead?
    Lets just say 2015 Q1 was an anomaly. Then are this past quarter's rev really that bad???

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