Goldman Sachs profits tumble despite strong trading results

Goldman Sachs profits tumble despite strong trading results

Goldman Sachs Chief Executive David Solomon praised the investment bank's performance, which was challenged by "increased volatility and uncertainty" in the macroeconomic environment
Goldman Sachs Chief Executive David Solomon praised the investment bank's performance, which was challenged by "increased volatility and uncertainty" in the macroeconomic environment. Photo: Patrick T. FALLON / AFP/File
Source: AFP

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Goldman Sachs reported a 48 percent drop in quarterly earnings Monday after setting aside more funds in case of bad loans, but shares rose as it topped analyst estimates.

The US investment bank became the latest financial heavyweight to suffer a decline in second-quarter results as the weakening macroeconomic environment prompts them to hold funds in case of defaults.

Operations were mixed, but Goldman scored a big jump in revenues tied to trading amid volatile markets.

Profits were $2.8 billion for the second quarter following an eight percent slide in revenues to $11.9 billion.

Goldman established $667 million in provisions, a shift from the year-ago period when earnings were boosted by $92 million in reserve releases.

Goldman Chief Executive David Solomon referred in a press release to "increased volatility and uncertainty" in the environment, praising the bank's performance "in these challenging markets."

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Other bank executives last week alluded to similar worries amid rising inflation, the war in Ukraine and other factors, but said the US economy still appeared to be on solid footing for now.

In terms of operations, Goldman suffered a drop in revenues connected to mergers and acquisition advising and loan underwriting.

The bank's own investments in equities reported a $221 million loss in the period. But Goldman scored an increase in its consumer banking.

Shares rose 3.8 percent to $305.05 in pre-market trading.

Source: AFP

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