Goldman Sachs results hit by slowdown in corporate mergers
Source: AFP
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A slowdown in corporate transactions and weak trading results weighed on Goldman Sachs' first-quarter results on Tuesday, sending shares lower.
The big investment bank pointed to a "significant decline in industry-wide completed mergers and acquisitions transactions" and much lower revenues for currency and commodities trading as drivers of the dip in profits.
Net income came in at $3.1 billion, down 19 percent from the year-ago period on a five percent drop in revenues to $12.2 billion.
The results came on the heels of a stream of solid earnings reports by JPMorgan Chase, Citigroup and other large banks that benefited from a rise in interest rates that allowed them to charge more for loans in their vast consumer banking businesses.
Goldman's results included a $470 million loss connected to a partial sale of the loan portfolio of Marcus, a consumer banking initiative Goldman launched in 2016 that has been largely phased down.
On the positive side, Goldman scored higher revenues in asset and wealth management, thanks partly to the rise in public equity investments during a quarter in which US stocks rallied.
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Alluding to the travails of midsized US banks following the demise of Silicon Valley Bank as "another real-life stress test," Chief Executive David Solomon said the events last month showed "the resilience of Goldman Sachs and the nation's largest financial institutions."
Shares of Goldman dropped 3.7 percent to $327 in pre-market trading.
Source: AFP
