Goldman Sachs quarterly net falls by 21pc to US$2.2bBusiness | 15 Apr 2019 8:52 pm
Goldman Sachs said its first quarter earnings fell by 21 percent from a year earlier, hurt by a slowdown in trading.
The investment bank earned a profit of US$2.25 billion, or US$5.71 a share, down from a profit of US$2.83 billion, or US$6.95 a share, in the same period a year earlier. The results did beat analysts' expectations, however. The average estimate of six analysts surveyed by Zacks Investment Research was for earnings of US$4.74 per share..
Goldman's profits were primarily hurt by their trading desks. Once a place of record profitability for the bank, Goldman's trading desks have struggled under lighter trading combined with periods of extreme volatility that are hard to navigate.
Net revenues in Goldman's fixed income, currency and commodities division was US$1.84 billion, down by 11 percent from a year ago. Stock trading was even worse, reporting net revenues of US$1.77 billion, down 24 percent.
David Solomon, Goldman's chairman and chief executive officer, described the quarter as a "muted start to the year,'' in a written statement.
Other parts of Goldman's businesses struggled as well. The bank reported a 12 percent decline in net revenues in its investment management businesses, and a 14 percent decline in net revenues in its investing and lending business.
Goldman's return on tangible equity, a measurement that describes how well a bank is performing with underlying assets, was 11.7 percent. Banks like Goldman and its competitor Morgan Stanley aim for a return on equity above 10 percent.
Firmwide Goldman said it had net revenues of US$8.81 billion, down by 13 percent from last year, below analysts' estimates, according to Zachs. -AP