Goldman Sachs Profit Falls 58% on Consumer-Lending Pullback
The bank also took impairments related to real-estate investments, much of it tied to office properties Goldman Sachs missed analysts’ per-share earnings expectations. Thalia Juarez for The Wall Street Journal Thalia Juarez for The Wall Street Journal By AnnaMaria Andriotis Updated July 19, 2023 8:24 am ET Goldman Sachs reported significantly lower profit for the second quarter, hurt by write-downs in its consumer and asset-management businesses. The bank on Wednesday said quarterly profit was $1.22 billion, down 58% from a year ago.
Goldman Sachs reported significantly lower profit for the second quarter, hurt by write-downs in its consumer and asset-management businesses.
The bank on Wednesday said quarterly profit was $1.22 billion, down 58% from a year ago.
That amounted to $3.08 per share, which missed the $3.16 per share expected by analysts polled by FactSet.
Revenue was $10.9 billion, down 8% from a year ago. That still beat the $10.61 billion expected by analysts.
Goldman is the only one among its big-bank peers to miss per-share earnings expectations. And while Citigroup and Morgan Stanley also reported profit declines, Goldman’s was the biggest.
JPMorgan and Wells Fargo reported higher profits for the second quarter, boosted by their big consumer arms.
Goldman’s shares slipped 0.1% in premarket trading.
At Goldman, investment-banking revenue fell 20%. Investment banking was roughly flat at Morgan Stanley, and down at JPMorgan and Citigroup.
Goldman’s trading revenue fell 14%. Trading revenue was also down at Morgan Stanley, JPMorgan and Citigroup.
Goldman’s return on equity fell to 4%, from 11.6% last quarter and 10.6% a year prior.
The earnings miss and the decline in return on equity reflect the challenges that Goldman is encountering as it tries to overhaul two areas of its business—pulling back on what were once ambitious consumer-lending efforts and changing its asset-management model.
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Goldman said Wednesday that it wrote down $504 million of “goodwill” related to its consumer-platforms unit. That unit houses, among other things, the specialty lender GreenSky. Goldman bought GreenSky just last year, but it is in the process of reviewing bids from potential buyers.
Also, Goldman took impairments of about $485 million related to real-estate investments, much of it tied to office properties, within its asset-management business. The impairments reflected properties the bank sold as well as properties the bank has marked down but not yet sold.
Goldman under CEO
David Solomon has been reworking the asset-management business. That includes selling investments that were made using Goldman’s own balance sheet and its partners’ money.Write to AnnaMaria Andriotis at [email protected]
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