Wall Street giant Goldman Sachs shattered forecasts on Tuesday with US$3.44 billion in quarterly profits after paying back a US government bailout, suggesting the financial crisis is easing.
Goldman, which reimbursed a US$10 billion federal bailout in full in the second quarter, said its net profit soared 65 percent thanks to robust trading operations.
The prestigious financial firm is the first of the “big guns” in the sector to report second-quarter results. Rounding out the week is JPMorgan Chase today, followed by Bank of America and Citigroup tomorrow.
Goldman reported earnings per share of US$4.93, besting analysts’ forecast of US$3.54.
“While markets remain fragile and we recognize the challenges the broader economy faces, our second-quarter results reflected the combination of improving financial market conditions and a deep and diverse client franchise,” chairman and chief executive Lloyd Blankfein said in a statement.
Goldman, the last of the major Wall Street investment banks left standing after the financial meltdown late last year, said that excluding its payback of government aid under the US Treasury’s Troubled Asset Relief Program (TARP), it had earnings per share of US$5.71.
Last month Goldman was among 10 major US banks repaying the Treasury for the capital injections, in a sign of a stabilizing financial system.
A number of firms were eager to get out from under the TARP, in part to escape federal scrutiny of executive compensation.
Goldman’s gold-plated earnings came as investors fretted about embattled CIT Group, a major player in industrial loans.
CIT, which operates in more than 50 countries and provides financial services to small and medium-sized businesses, is seeking fresh government aid to avoid collapse.
The Wall Street Journal reported yesterday that CIT was nearing a deal in its talks with federal regulators to obtain a government aid package. The cash-strapped company’s board, it said, had discussed a number as high as US$775 million for the drawdowns.
US government officials are split over the amount of aid that should be given to CIT and, some say, CIT is seeking to exaggerate the consequences of its potential collapse, the newspaper said.
“There is also the risk that propping up CIT will reinforce the stigma that Washington will bail out companies that aren’t even considered too big to fail,” it said.
The Central Weather Administration (CWA) yesterday said it expected to issue a sea warning for Typhoon Fung-Wong tomorrow, which it said would possibly make landfall near central Taiwan. As of 2am yesterday, Fung-Wong was about 1,760km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, moving west-northwest at 26kph. It is forecast to reach Luzon in the northern Philippines by tomorrow, the CWA said. After entering the South China Sea, Typhoon Fung-Wong is likely to turn northward toward Taiwan, CWA forecaster Chang Chun-yao (張峻堯) said, adding that it would likely make landfall near central Taiwan. The CWA expects to issue a land
Taiwan’s exports soared to an all-time high of US$61.8 billion last month, surging 49.7 percent from a year earlier, as the global frenzy for artificial intelligence (AI) applications and new consumer electronics powered shipments of high-tech goods, the Ministry of Finance said yesterday. It was the first time exports had exceeded the US$60 billion mark, fueled by the global boom in AI development that has significantly boosted Taiwanese companies across the international supply chain, Department of Statistics Director-General Beatrice Tsai (蔡美娜) told a media briefing. “There is a consensus among major AI players that the upcycle is still in its early stage,”
The Central Weather Administration (CWA) yesterday said it is expected to issue a sea warning for Typhoon Fung-wong this afternoon and a land warning tomorrow. As of 1pm, the storm was about 1,070km southeast of Oluanpi (鵝鑾鼻), Taiwan’s southernmost point, and was moving west-northwest at 28 to 32kph, according to CWA data. The storm had a radius of 250km, with maximum sustained winds of 173kph and gusts reaching 209kph, the CWA added. The storm is forecast to pass near Luzon in the Philippines before entering the South China Sea and potentially turning northward toward Taiwan, the CWA said. CWA forecaster Chang Chun-yao (張峻堯) said
PREPARATION: Ferry lines and flights were canceled ahead of only the second storm to hit the nation in November, while many areas canceled classes and work Authorities yesterday evacuated more than 3,000 people ahead of approaching Tropical Storm Fung-wong, which is expected to make landfall between Kaohsiung and Pingtung County this evening. Fung-wong was yesterday morning downgraded from a typhoon to a tropical storm as it approached the nation’s southwest coast, the Central Weather Administration (CWA) said, as it issued a land alert for the storm. The alert applies to residents in Tainan, Kaohsiung, Pingtung and Taitung counties, and the Hengchun Peninsula (恆春). As of press time last night, Taichung, Tainan, Kaohsiung, and Yilan, Miaoli, Changhua, Yunlin, Pingtung and Penghu counties, as well as Chiayi city and county had
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