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Goldman Sachs has reported a 36 per cent drop in third-quarter profits, the bank’s eighth straight quarter of falling earnings, as it grapples with a slowdown in fixed income trading revenues and losses following its pullback from retail banking.
However, the bank eked out a year-on-year increase in investment banking revenues for the first time in almost two years in a sign that the dealmaking drought may be coming to an end.
Goldman said on Tuesday that net income for the quarter was $1.88bn, down from $3bn a year earlier and just shy of analysts’ estimates for about $1.92bn, according to data compiled by Bloomberg.
Goldman’s earnings were hit during the quarter by a loss on the sale of home improvement lending platform GreenSky to a private equity-led consortium, which was confirmed last week, and the sale of what the bank called “substantially all” of its Marcus loan portfolio, as it nears an exit from its retail lending business.
Unlike peers JPMorgan Chase and Morgan Stanley, Goldman lacks the same diversification in other businesses to compensate for a period of weaker performance in its core investment banking and trading activities.
Chief executive David Solomon, who has come under criticism from some employees over his running of the bank, has outlined a strategy of diversification into asset and wealth management, but those activities still make up a relatively modest part of Goldman’s profits.
“We continue to make significant progress executing on our strategic priorities and we’re confident that the work we’re doing now provides us a much stronger platform for 2024,” Solomon said in a statement.
This article has been updated to reflect the latest analyst estimates for net income.
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