TradingKey - JPMorgan (JPM) and Goldman Sachs (GS) both delivered year-over-year growth in third-quarter revenue and profit. Goldman Sachs achieved a higher growth rate, driven primarily by equity trading and investment banking, though it remains more sensitive to capital market activity. JPMorgan's operations span retail banking, credit cards, payments, investment banking, market services, and asset management, providing more diversified revenue streams and relatively stable earnings performance.
Future investment returns for both banks will depend on earnings growth, capital adequacy ratios, shareholder return policies, and entry valuations.
What Is the Difference Between JPMorgan and Goldman Sachs?
Comparison Metric | JPMorgan Chase (JPM) | Goldman Sachs (GS) |
Core Businesses | Retail banking, credit cards, payments, investment banking, and asset management | Investment banking, equities and fixed-income trading, and asset and wealth management |
Revenue Profile | Sources are relatively diversified, with net interest income playing a prominent role | More sensitive to capital market activities such as trading, underwriting, and M&A |
Key Strengths | Deposit scale, client coverage, and capital strength | Investment banking and institutional trading capabilities |
Key Risks | Credit costs, interest rate changes, and expense growth | Market volatility, fluctuations in trading revenue, and investment banking cycles |
JPMorgan Chase has a relatively diversified business model with stronger revenue stability across different economic environments, though it remains subject to credit quality and interest rate changes. Goldman Sachs benefits more directly from a rebound in M&A, IPOs, underwriting, and trading activities, typically exhibiting higher profit elasticity when capital markets are active and more pronounced volatility when markets cool down.
Goldman Sachs Posts Faster Q3 Growth; JPMorgan's Revenue Structure Is More Diversified
JPMorgan Chase reported third-quarter managed revenue of approximately $50.907 billion, up 8% year-over-year; net income was $15.305 billion, up 6% year-over-year, with earnings per share of $5.57.
Net interest income grew 13% to approximately $27.1 billion, while Markets revenue reached approximately $10.3 billion. The company's reported ROE was approximately 17%, and ROTCE was 20%. The quarter included $658 million in investment securities losses; excluding this item, net income was approximately $15.8 billion.
Goldman Sachs reported third-quarter net revenues of $18.679 billion, up 23% year-over-year; net income was $5.294 billion, up 29% year-over-year, with earnings per share of $17.01.
Global Banking & Markets revenue rose 32% to $13.458 billion, with Equities revenue up 72% to $6.441 billion; Asset & Wealth Management revenue increased 14% to $5.051 billion. The company's annualized ROE for the third quarter was 18.7%.
Goldman Sachs' growth this quarter was primarily driven by equities trading and investment banking, with future revenues remaining dependent on transaction completion progress and market conditions. JPMorgan Chase's third-quarter credit costs were $2.743 billion, including a $539 million reserve build; if the economy slows, credit costs could continue to rise.
JPM vs. GS: Which Is Better for Long-Term Holding?
In the third quarter, JPMorgan Chase paid $4.4 billion in dividends to common shareholders and repurchased $664 million in stock; Goldman Sachs returned approximately $4.49 billion to common shareholders, including about $3.0 billion in share repurchases. Both banks maintained strong shareholder return capabilities, but with different capital allocation priorities.
As of the close on October 15, JPM closed at $335.53, trading at a TTM P/E ratio of approximately 14.1x, a P/B ratio of about 2.5x, and a price-to-tangible-book (P/TBV) ratio of around 3.0x. GS closed at $891.28, trading at a TTM P/E ratio of approximately 12.8x, a P/B ratio of about 2.4x, and a P/TBV ratio of around 2.6x.
JPM's operations cover deposits, loans, credit cards, payments, investment banking, and asset management. Its revenue sources are well-diversified, generally offering stronger earnings stability, though it remains exposed to risks from credit costs, interest rate changes, and expense growth.
GS is more reliant on investment banking, equity and fixed-income trading, and asset management. It exhibits greater profit elasticity during active capital markets, while performance volatility may be more pronounced during market downturns.
If business diversification, deposit base, and cross-cycle operational capabilities are prioritized, JPM is relatively solid; if one is optimistic about a rebound in M&A, IPOs, underwriting, and trading activity and can tolerate greater performance volatility, GS may provide higher earnings elasticity.
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