Goldman Sachs CEO David Solomon announced at the Barclays Global Financial Services Conference that the bank’s non-compensation expenses are on track to be more than $500 million higher this quarter compared to Q2. This increase follows an exceptional second quarter with net revenues of $20.34 billion and net earnings of $6.63 billion. While the equities business remains strong with a 72% year-over-year increase, the fixed income, currencies, and commodities (FICC) segment is showing weaker performance. Operating expenses had already climbed 26% year-over-year in Q2 to $11.67 billion. The additional $500 million in non-compensation costs raises questions about margin compression if revenues do not keep pace. Q3 earnings are expected around mid-October.
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