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Goldman Sachs reported a 36 percent drop in third-quarter profit, the bank’s eighth straight quarterly revenue decline, as it grapples with losses following a slowdown in fixed-income trading revenues and a retreat from retail banking.
However, the bank revealed a year-on-year increase in investment banking revenue for the first time in almost two years, in a sign that the deal-making drought may be ending.
Goldman said on Tuesday that net income for the quarter was $1.88bn, down from $3bn a year earlier and analysts’ estimates of $1.92bn, according to data compiled by Bloomberg.
Goldman’s earnings in the quarter reflected a loss on the sale of home improvement lending platform GreenSky to a private equity-led consortium and the sale of “substantially all” of its Marcus loan portfolio, confirmed last week. , is on the verge of exiting its retail lending business.
Unlike peers such as JPMorgan Chase and Morgan Stanley, Goldman does not have the same diversification into other businesses to compensate for weak performance in its core investment banking and trading operations.
Chief Executive David Solomon, who has come under fire from some employees for running the bank, has outlined a strategy to diversify into property and wealth management, but those activities are still a relatively modest part of Goldman’s profits.
“We continue to make significant progress in implementing our strategic priorities, and we believe the work we are doing now provides us with a very strong platform for 2024,” Solomon said in a statement.
This article has been updated to reflect the latest analyst estimates for net income.