Goldman Sachs profits plunged by two-thirds last quarter, missing expectations and capping a grim year that has forced the bank to embark on its biggest cost-cutting exercise since the financial crisis.
A sharp slowdown in investment banking activity drove what was Goldman’s fifth straight quarter of falling profits.
The Wall Street bank’s net income tumbled to $1.3bn in the fourth quarter, short of analysts’ expectations of $2.2bn and down from $3.9bn in the same period last year.
Investment banking revenue fell 48 per cent to $1.9bn. Rivals JPMorgan Chase, Bank of America and Citigroup reported drops of between 54 and 58 per cent last Friday.
Goldman’s earnings were hit by $972mn in provisions for credit losses, which the bank attributed to its credit card and point-of-sale loan portfolios.
Net revenues for the fourth quarter totalled $10.6bn, down from $12.6bn a year earlier and just shy of analysts’ forecast of $10.7bn.