When Goldman Sachs was forced to come out of the shadows during the financial crisis and become an American household name, people suddenly realised that this mysterious firm was a powerful force that could impact their every day lives.
They also learned an important truth well known on Wall Street — Goldman Sachs never loses.
But the world of finance has gone through dramatic changes since that moment. Central Bank intervention has impacted the bond market, regulation has changed how much money banks can make trading for themselves, and stock trading is a different game thanks to technology.
This kind of volatility can create a new world order, and according to research firm Coalition, Goldman Sachs is losing ground.
Check out the league tables below comparing Goldman’s share of Wall Street’s business in 2014 and 2013.
You’ll note that Goldman’s Investment Banking Division (basically advisory services) is still in its customary place (number one, baby), but that its Equities and Fixed Income Currency and Commodity trading has suffered.
Lets talk equities first. In Q1 2014, the bank made $US416 million trading equities for clients. That’s down 49% from the same time in 2013 when the bank made $US809 million.
In 2013, a year when the stock market shot up over 30%, Goldman’s client stock trading revenue fell from $US3.2 billion in 2012 to $US2.6 billion.
The bank has been public about the fact that it thinks high frequency trading has something to do with this — and that