Record profits in the financial sector
The season of the profit warnings is finished on Wall street, now is time for big surprises. Morgan Stanley has surprised the investors announcing a higher profit. This company is the last of a series of banks and investment funds that have surprised in positive. The trading sector has been fundamental in the profit growth. When the markets go up there is always a boost to the investment banking sector.
Also Bank of America released record profits in the first quarter of 2015. Analysts have expected $0.29 of earning per share while the company reported $0.36. The CEO of the company commented that he continues to remain optimistic for the next months because he expects loans growing further and the non performing loans to improve from past negative record levels.
Citigroup Inc. also excels in the first quarter 2015. The net incomes reached $4.8 billion or $1.51 per share. Comparing these figures with the first quarter of 2014 it was a big success according to the CEO of the bank. The loans and deposits increased both and this can only be good for the banking business.
Goldman Sachs, could not fail to surprise. At the strongest bank in the trading sector, incomes from trading bonds, equities, currencies and swaps have jumped at the highest level from the beginning of the financial crisis. The bank made $2.75 billion of profits in the first quarter or $5.94 per share. This is much higher than the $4.02 per share of the same period of last year and also much higher from the $4.26 per share that analysts have expected to see. The CEO of the bank Mr. Harvey Schwartz said that he continues to be optimistic about the next future and he sees higher value for his company in the coming months.
The surprises in wall street didn’t come only from the banks but also from the investment funds. The biggest assets manager, Blackrock Inc announced Thursday 16, that the earning per share was $4.84 in the first quarter of 2015 some 8.7 % higher from the same period of last year. This was also a surprise for investors that have expected only $4.52 per share. The legendary CEO of the company Mr. Larry Fink was very pleased to show the figures of the inflows to the funds, specially to the bond funds. He also told to investors that the strong dollar had damaged the company considerably but he does not expect the same damage in the second quarter, thanks to the stabilization of the currency. The assets under management of this giant reached the record of $4.77 trillion.
The other giant of the asset management industry, Blackstone Group also announced record profits. This company specialized much in the private-equity reported that it has doubled the profits respect to the last year thanks to the liquidation of some stakes in different companies that it owned. The CEO and co-founder of the company Mr. Stephen Schwarzman and at the same time its largest shareholder is going to cash about $206 million this quarter only, as the company will distribute $0.89 in dividends.
The past week has been very busy and stressful for analysts who have not seen materializing the forecasts for the profits of many large companies. Certainly they will be more optimistic for the forecasts of the second quarter.