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Goldman Sachs sees big quarterly profits fall Goldman Sachs sees big quarterly profits fall
(35 minutes later)
US investment bank Goldman Sachs has reported a big fall in quarterly profits, due largely to a reduction in bond trading revenue.US investment bank Goldman Sachs has reported a big fall in quarterly profits, due largely to a reduction in bond trading revenue.
Net income for the fourth quarter to 31 December fell to $2.33bn (£1.43bn), down 19% compared with the same period last year. Net earnings for the fourth quarter to 31 December fell to $2.33bn (£1.43bn), down 19% compared with the same period last year.
But full-year net income rose 8% to $8.04bn on revenues of $34.2bn. But full-year net earnings rose 8% to $8.04bn on revenues of $34.2bn.
The bank paid out $12.6bn in pay and bonuses over the year, down 3% compared with 2012. Rival bank Citigroup also reported results, with its profits also hit by reduced income from bond trading.
Chief executive Lloyd Blankfein described the fixed-income market as "a somewhat challenging environment", as US investors prepared for expected higher interest rates. Citigroup reported a net income of $2.6bn for the quarter, up from the $2.15bn a reported a year earlier but below many analysts' expectations.
JP Morgan, which reported its results on Tuesday, also reported suffering from falling or stagnant bond trading volumes.
Tough environment
Goldman Sachs chief executive Lloyd Blankfein described the fixed-income market as "a somewhat challenging environment", as US investors prepare for higher interest rates.
Goldman's revenue from client trading in fixed income, currencies and commodities dropped 15% in the fourth quarter to $1.72bn.Goldman's revenue from client trading in fixed income, currencies and commodities dropped 15% in the fourth quarter to $1.72bn.
This was partly due to "significantly lower revenues in mortgages", the bank said.This was partly due to "significantly lower revenues in mortgages", the bank said.
But quarterly investment banking revenues rose 22% year-on-year to $1.72bn.But quarterly investment banking revenues rose 22% year-on-year to $1.72bn.
Net income applicable to shareholders fell to $2.25bn, or $4.60 a share, over the period, compared with $2.83bn, or $5.60 a share, in the same quarter in 2012, the bank said.Net income applicable to shareholders fell to $2.25bn, or $4.60 a share, over the period, compared with $2.83bn, or $5.60 a share, in the same quarter in 2012, the bank said.
Looking forward, Mr Blankfein said: "We believe that we are well positioned to generate solid returns as the economy continues to heal and provide considerable upside for our shareholders as conditions materially improve."Looking forward, Mr Blankfein said: "We believe that we are well positioned to generate solid returns as the economy continues to heal and provide considerable upside for our shareholders as conditions materially improve."
The bank paid out $12.6bn in pay and bonuses over the year, down 3% compared with 2012.
Shares in Goldman Sachs have risen nearly 32% over the last 52-week period.Shares in Goldman Sachs have risen nearly 32% over the last 52-week period.