Size and Risk/Return: Morgan Stanley vs Goldman vs Charles Schwab
- Jun 28
- 7 min read
June 29, 2026 | In this issue of The Institutional Risk Analyst, we look at the large investment advisory firms – AMP, SCHW, GS, MS, RJF & SF – for subscribers to our Premium Service.
The major Wall Street investment firms tracked by the WGA Bank Top 50 followed the industry trend and reported lower credit costs in Q1 2026. Income was higher due to the brisk activity in the capital markets in the first three months of the year, but asset returns and funding costs fell significantly.
We suspect that both trends will be partially reversed in Q2 2026 results and very visible in 2H 2026. Suffice to see that Elon Musk was lucky indeed to get his IPO for SpaceX (SPCX), which we own, to liftoff before the AI selloff.
One notable development in Q1 was Goldman Sachs (GS), which reported only 7bp of net losses in Q1 vs 46bp in Q4 2025. Why were Goldman Sachs' credit expenses were notably lower compared to the prior quarter? Because the firm recognized a massive $2.12 billion credit loss benefit in Q4 2025 following the transfer of its problematic Apple (AAPL) credit card loan portfolio to a held-for-sale status, which artificially flattened the baseline for Q1 2026's provisions.
Big question: What will Goldman’s credit losses look like once the Apple portfolio is gone? If it turns out that the GS net loss rate ex-Apple is closer to MS and the other investment houses, then the decision by GS CEO David Solomon to get into business with AAPL becomes even more suspect.
Source: FFIEC
Want to read more?
Subscribe to theinstitutionalriskanalyst.com to keep reading this exclusive post.
