Goldman Sachs Group Inc., one of the major global banks in Japan to cut profits last year, retreating from the 2023 bumper.
Net income in Goldman Sachs’ local securities division fell 30% to 27.6 billion yen in the year ended December 31, a document shows.
Barclays plc and Deutsche Bank AG have seen double-digit profits in Japan investment banking units, contrary to the outstanding performance of the previous year, in part due to weaker fixed income transaction segments. By comparison, the local division of Bank of America’s companies resumed profitability, while UBS Group AG’s net revenue rose 82%.
A variety of results suggest that 2024 has been a tricky year for the world’s largest lenders as investors adapt to rising interest rates. The country’s markets have made the biggest moves in decades in August, with stocks having the most since the collapse and bond prices fluctuated in October 1987, hurting some traders.
“This does not mean that the heat has fallen, there will be another period of stagnation,” said Hideyasu Ban, senior analyst at Bloomberg Intelligence. “As Japan’s economy and market conditions are normal, investment banks’ revenue bins continue to grow, thus increasing their profit margins.”
Even if revenues fell, Goldman Sachs’ local department still regarded it as the most profitable foreign banks that closed books in December, three times more than its closest competitor. Profits fell because it booked a higher liability reserve, which was consistent with the increase in transaction volume.
Barclays ranked second from ranking. British banks are seeking to strengthen their yen interest rate operations to capitalize on Japan’s bond market revival. A spokesman for Barclays Securities Japan Limited said its fee-based financing business should be able to generate profits without the impact of market volatility.
BOFA Securities Japan Co. made a profit of 7.5 billion yen after losing 6 billion yen in the previous year. Charlotte North Carolina lenders’ units record huge gains in stock and bond trading.
The spokesman said that with the development of market operations, investment banking and wealth services, profits continued from UBS Securities Japan and its majority stake in the joint venture.
Citigroup Inc. finished third after its Japanese securities division’s net income fell 33%. The company has the highest number of employees among banks around the world, even though the highest levels of staff were reduced last year.
This article was generated from the Automation News Agency feed without the text being modified.
