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Goldman Sachs says FICC trading declines are not a concern

FICC trading revenues remained flat in the first quarter at Goldman Sachs, as its rivals reported significant increases.

By Hayley McDowell hayley.mcdowell@strategic-i.com April 19, 2017 10:24 AM GMT

Goldman Sachs has brushed off its stale fixed income, currencies and commodities (FICC) quarterly results, despite significantly lagging behind its US counterparts

Speaking on the first quarter’s earnings call, Harvey Schwartz, co-chief operating officer at Goldman Sachs, explained the FICC results are not a major concern for the US investment bank.

“I think last year in the third and fourth quarter, where you might have said we outperformed, that wasn’t a moment of celebration for us… this isn’t a moment of bigger concern for us,” he said.

This week, Goldman Sachs saw a quarterly decline within its institutional client services business, with fixed income trading suffering from low levels of volatility and client activity.

In comparison, JP Morgan reported a surge in fixed income trading with revenues up 17% in the first quarter this year to $4.2 billion.

Similarly, Bank of America Merrill Lynch’s quarterly fixed income trading sales soared a significant 29% in the first quarter to $2.9 billion.

Martin Chavez, deputy chief financial officer at Goldman Sachs, added the bank had ‘underperformed’ this quarter and it was driven by declines in currencies and commodities.

He countered Goldman Sachs’ competitors had bigger financing businesses and more significant corporate footprints as a result of larger lending books.

“But again its one quarter and business mix differences might reflect performance, relative performance quarter to quarter,” he said.

Schwartz concluded on the call: “Quarter to quarter, things are going to vary. There may be differences in franchises, as Marty has already pointed out.”