Goldman Sachs

German Woes, American Dominance

deutsche bank_goldman sachs Getty
Goldman's headquarters (left) are looking shinier than Deutsche's these days.
  • Why it matters

    Why it matters

    Investment banking was once Deutsche Bank’s main source of profits. Falling behind U.S. rivals will make it harder for the bank to recover.

  • Facts


    • U.S. banks Goldman Sachs, Bank of America and JP Morgan have all reported strong financial results, while Deutsche Bank is expected to post another full-year loss.
    • Goldman Sachs and other US banks benefited from the Brexit, due to the resulting price fluctuations and the withdrawal of European competitors from the UK.
    • US banks hold the top five positions in industry analytics firm Coalition’s global ranking of investment banks. Deutsche Bank has slipped from third to sixth in the ranking.
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It was a tough act for Goldman Sachs to follow: U.S. rivals Bank of America and JP Morgan had already announced their strong own financial results, and analysts were already expecting more of the same from Goldman.

And yet the world’s most famous investment bank still managed to surprise, reporting a 50-percent profit increase to $2.09 billion that sent its share price up 2.5 percent on opening.

“We are seeing strong performance in all areas,” said chief executive Lloyd Blankfein.

Compare that to Europe’s largest investment bank. When Deutsche Bank reports its own results later this month, analysts widely expect to see a significant decline in profits and, unlike Goldman Sachs, a decline in securities trading revenues by a third.

If that wasn’t clear before, it is now: A gap is widening between American and European financial institutions.

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