Goldman Sachs Reports $1.88 Billion of Net Earnings and Drops 3%


Goldman’s 3rd quarter profit fell 26%, hit by a slowdown in deal-making and losses on the bank’s stakes in companies.

On Tuesday, shares of Goldman Sachs fell 3% as the company reported $1.88 billion of net earnings, or $4.79 a share, on $8.32 billion of revenue, roughly in line with expectation. Chief Executive, David Solomon, has chosen to commit money into new initiatives such as consumer banking and ultrafast trading.

Mr. Solomon is expected to lay out his growth plans for Goldman in early 2020. The priorities he has sketched out so far include growing Goldman’s new consumer bank and its private-investing business, cross-selling top corporate clients on products like money management, and cutting costs across the firm.

Many concerns have plagued Goldman this quarter. The company is expected to pay a hefty fine for overlooking red flags in its dealings with the fund known as 1MDB. Revenue from investing activities fell 40% this quarter, the worst in more than three years. The firm has been cutting down on the money available for its traders to put to work, shifting it to initiatives that are more profitable, like lending, or opportunities like its credit-card partnership with Apple Inc. Investment banking revenue fell 15%, hit by declines in all three of its main products, merger advisory and debt and equity underwriting.

Goldman is the leading stock underwriter this year, according to Dealogic, with $50 billion of deals under its belt and a narrow edge over Morgan Stanley. Goldman’s revenue from fixed-income trading, a trouble spot in recent years, was up 8% in the quarter. Goldman now oversees $1.8 trillion in its asset-management arm, up 6% from June 30.

A tepid start to several banks that will report today.

Read full article here


Economics, Finance and Investing