Friday 24 March 2017

Goldman profits plunge to worst in four years

A Goldman Sachs sign is seen above the floor of the New York Stock Exchange. Photo: Reuters
A Goldman Sachs sign is seen above the floor of the New York Stock Exchange. Photo: Reuters

Richa Naidu

Goldman Sachs Group reported its smallest quarterly profit in more than four years as a $5bn settlement of crisis-era legal claims added pain to an already tough three months.

Like other banks, Goldman had a rough year as oil prices plummeted, concerns about China's economy intensified, and nervousness about the timing and pace of US rate rises weighed on credit markets.

Goldman, the last of the big US banks to release fourth-quarter earnings, reported a drop in revenue in all but one of its main businesses.

The only bright spot was investment banking, which helped the bank beat revenue and profit expectations for the three months ended December 31. Net earnings fell 71.8pc, making it the third straight quarter that the Wall Street bank's profit has plunged.

Goldman's shares fell as much as 1.9pc to $153.78 in early trading yesterday, their lowest in more than one and a half years.

The new year has also started on a grim note, with oil prices falling to their lowest in 13 years and stock prices dropping sharply around the world.

On the whole, the big banks did better than expected in the quarter, but mainly due to cost cuts - the part of their business over which they have most control. Goldman cut non-compensation costs by 7.2pc after excluding litigation and regulatory costs. (Reuters)

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