What To Watch In Goldman Sachs Earnings Report

Goldman Sachs (GS) is scheduled to report results of its third fiscal quarter before the market open on October 18, with a conference call scheduled for 9:30 am EDT.

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What to watch for: 

ONLINE LENDING: On Thursday, Goldman Sachs announced the launch of its online consumer-lending platform, known as Marcus and named after one of the bank's founders. At Marcus.com, borrowers can apply for fixed-rate, no-fee personal loans of up to $30,000 for periods of two to six years. This puts Goldman in direct competition with fintech upstarts, such as the venture-funded online lender LendingClub (LC), The Wall Street Journal said. In August, The Journal had reported that the bank was turning to more basic banking businesses of deposits and loans for the middle class, and was using the Internet to do so. Aside from Marcus, Goldman began taking consumer deposits online in April after acquiring General Electric's (GE) online-savings platform, which came with $16B of deposits and a call center in Iowa, the publication added.

LIBYAN FUND SUIT: After two and half years, the legal battle between Goldman Sachs and Libya's $67B sovereign fund came to an end last week, when a London court ruled that the bank did not dupe Libyan officials. At the center of the dispute was the $1.2B the Libyan Investment Authority paid Goldman to invest in nine equity derivatives trades, which turned out to be worthless.

BREXIT UNCERTAINTIES REMAIN: Responding to a Sunday Times report that it planned to shift 2,000 jobs away from London if Brexit caused too many headaches for banking in the region, a Goldman Sachs spokesperson told Bloomberg last week that the bank had not yet decided on any job transfers. The spokesperson noted that Goldman is still evaluating the implications of Brexit and that "numerous uncertainties" remain, adding that "as a result we have not taken any decisions as to what our eventual response will be." The month before, Reuters reported that U.K. Prime minister Theresa May was planning to meet business chiefs from companies, including Goldman Sachs, IBM (IBM) and Amazon (AMZN), in an effort to reassure investors after the country's vote to exit the EU.

NEW FED PROPOSALS: Last month, two U.S. regulators pressed for new limits on banks' involvement in commodities and other businesses outside traditional lending, with the Federal Reserve recommending that Congress repeal banks' authority to engage in merchant banking, according to The Wall Street Journal. Given its long history in merchant banking, Goldman Sachs could be the bank hit hardest by the proposals, the publication noted.


 

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