Goldman Sachs unveils revamp as third-quarter profit falls

GOLDMAN Sachs Group said on Tuesday (Oct 18) it was reorganizing its business into three units, as the Wall Street giant undertakes another overhaul in less than three years, and reported a drop in third-quarter profit.

Profit applicable to common shareholders fell to US$2.96 billion, or US$8.25 per share, in the quarter ended Sep 30, from US$5.28 billion, or US$14.93 per share, a year ago.

Analysts had expected a profit of US$7.69 per share, according to Refinitiv data. It was not immediately clear if the reported numbers were comparable to estimates.

It is the biggest shakeup by the investment bank in just over two years and outlined plans for four core units: investment banking, global markets, consumer and wealth management and asset management.

The reshuffle comes as the Wall Street titan seeks to boost its income from fee-based businesses at a time when rising interest rates have dented valuations and deal-making. The overhaul follows a round of global job cuts in September that could have impacted hundreds of bankers.

The move also comes as the bank is rounding out a mixed quarter for big US banks, in which choppy capital markets and slowing economic growth weakened investment banking. However, rising borrowing costs boosted net interest income to cushion the blow.

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Dealmaking slowed in the quarter, casting a pall over some of Goldman’s most lucrative businesses.

Total revenue fell 12 per cent to US$11.98 billion in the quarter.

In the face of aggressive Federal Reserve rate increases and the war in Ukraine, investors, however, boosted trading activity, helping the bank’s fixed income, currency and commodities division. REUTERS