Goldman expects US$2.3 billion more in potential losses from legal disputes

GOLDMAN Sachs Group is expecting to incur US$2.3 billion more in potential losses from legal proceedings than the reserves it had set aside for such matters last year, a regulatory filing by the investment bank showed on Friday (Feb 24).

That was in line with what the bank had estimated at the end of its third quarter in September, but was higher than the US$2 billion loss it projected in 2021.

Goldman has been a target of lawsuits ranging from its role in Malaysia’s 1MDB sovereign wealth fund scandal to the collapse of Archegos Capital Management in 2021.

A long-running gender bias lawsuit alleging widespread bias against women in pay and promotions at the Wall Street bank is also expected to head to trial later this year.

Goldman also approved a US$30-billion stock buyback programme in February, it disclosed in the filing.

The disclosure comes ahead of a crucial investor day, where chief executive David Solomon is expected to present plans to reach key financial goals after some missteps that led Goldman to temper ambitions for its consumer banking unit, Marcus.

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Investment banks are hoping for a rebound in dealmaking in the second half of 2023 as the Federal Reserve eases off its rate-hike cycle, after a tough year when financing dried up and companies postponed plans for mergers and acquisitions.

Last month, Goldman said it was cutting around 3,200 jobs, which comprised 6 per cent of its workforce, in an attempt to cut costs. REUTERS