US investment bank stocks Bank of America and Goldman Sachs opened weaker in New York trading today after the duo reported disappointing quarterly results.
Goldman shares sagged around 2.4% on sharply lower trading revenues over the second quarter, while Bank of America´s stock price was down 1.4% owing to disappointing lending margins.
Goldman Sachs was hit by a 40% slump in revenues from its bond, currencies and commodities trading over the quarter. During a period when oil prices were hit by rising US stockpiles, the investment banking giant reported its worst ever result from commodities trading.
Despite the setback, however, the investment bank comfortably beat market expectations on overall earnings and revenue for the quarter. On the positive side, Goldman highlighted strong results from underwriting and M&A.
Bank of America disappoints
While shares in Bank of America were less adversely impacted, investors were disappointed by lending margins, with higher US interest rates having benefited the bank less than hoped. In common with Goldman, the bank also reported a decline in revenue from trading activities in fixed income, currencies and commodities.
Meanwhile, Bank of America beat overall earnings and revenue estimates, backed by record revenues from its global banking unit.
Stress tests bounce
US banking stocks received a boost last month from positive stress test results, which made more cash available for shareholder payouts. The sector has also been supported by Donald Trump´s election win amid hopes of looser regulation.