The big daddies of Wall Street, Citigroup Inc (NYSE:C) and Goldman Sachs Group Inc (NYSE:GS), recorded huge bumps in profit, for the three months leading up to December 2016 and needless to say, the Trump wave is being seen as one of the big factors behind the surge. Goldman Sachs recorded a net profit amounting to $2.15 billion for the latest quarter and when contrasted with the $574 million net profit earned in the same quarter in 2015, it is clear to see that Donald Trump’s unexpected victory in the Presidential elections in November was a notable factor. The revenues in the fourth quarter soared to $8.17 billion, a jump of a massive $900 million. In addition to that, the revenues from securities, currencies and commodities, clocked a 78% rise to end up at $2 billion. What is even more important to point out is that the operating expenses went down to $4.77 billion, a drop of a huge by 23% compared to the same period in 2015. The quarter has been truly fruitful for Goldman Sachs and the firm’s CEO Lloyd Blankfein said, “After a challenging first half, the firm performed well for the remainder of the year as the operating environment improved.”
On the other hand, Citigroup did not record as spectacular numbers as Goldman, but their earnings in the last quarter has been significantly higher than it was in 2015. Citi recorded a net profit amounting to $3.57 billion for the fourth quarter, rising by a handsome $230 million. The CEO of Citigroup Michael Corbat said, “We had a strong finish to 2016, bringing momentum into this year. We drove revenue growth in our businesses and demonstrated strong expense discipline across the firm.” Citi’s fixed income trading revenue experienced a jump of around 36% but that is not as big as the 173% jump that was recorded by
Morgan Stanley. Revenues for ongoing businesses rose to $16.3 billion, which is a rise of around 6%.Going back to Goldman, other than the obvious positive effects of a Trump victory that saw the financial markets get a massive boost, the firm did take some steps last year that seem to have borne fruit. Although trading is the primary acticity of the bank and forms a huge chunk of its revenue, it has managed to diversify and towards the end of 2016, Goldman made a foray into consumer lending. In addition to that, Goldman have also become a player in the investment management space and the diversification has certainly worked well for the bank. Overall, the last quarter of 2016 has been a big one for most banks but the true effects of the Trump presidency will be seen in the next quarter’s results.