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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 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 earnings rose 8% to $8.04bn on revenues of $34.2bn. | |
Rival bank Citigroup also reported results, with its profits also hit by reduced income from bond trading. | |
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. |