Goldman Sachs misses profit estimates on dealmaking slump

GOLDMAN Sachs Group on Tuesday (Jan 17) reported a bigger-than-expected 69 per cent drop in fourth-quarter profit due to heavy losses in its consumer business and a slump in dealmaking that hit its investment banking unit.

Shares of the bank were down nearly 1.7 per cent in premarket trading.

The bank reported a profit of US$1.19 billion, or US$3.32 per share, for the three months ended Dec 31, compared with US$3.81 billion, or US$10.81 per share, a year earlier.

Goldman’s investment banking fees fell 48 per cent in the quarter.

Wall Street has been under pressure as dealmaking activity stalls on worries over a weakening global economy due to high inflation, rising interest rates and market volatility.

The bank also reported a pre-tax loss of US$778 million in its platform solutions unit, which houses transaction banking, credit card and financial technology businesses.

That added to the US$1.2 billion loss for the consumer unit in the first nine months of 2022.

The market volatility, spurred by the Federal Reserve’s quantitative tightening has, however, boosted Goldman’s trading business.

Fixed income, currency and commodities trading revenue was up 44 per cent, while revenue from equities trading fell 5 per cent.

Overall net revenue was down 16 per cent at US$10.6 billion. REUTERS