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Goldman Sachs reported a 36 percent drop in third-quarter profits, the eighth straight quarter in which the bank’s profits have declined, as it suffers a slowdown in fixed income trading revenues and losses after it pulled out of retail banking.
However, the bank posted a year-on-year increase in investment banking revenue for the first time in nearly two years in a sign that its deal-making drought may be coming to an end.
Goldman said Tuesday that net income for the quarter was $1.88 billion, down from $3 billion a year earlier, and slightly below analyst estimates of about $1.92 billion, according to data compiled by Bloomberg.
Goldman’s earnings during the quarter were hurt by the loss of 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 described as “all” of its Marcus loan portfolio. , as it is close to exiting the retail lending business.
Unlike peers JPMorgan Chase and Morgan Stanley, Goldman Sachs lacks the same diversification into other businesses to make up for a period of weak performance in its core investment and commercial banking activities.
Chief Executive David Solomon, who has been criticized by some employees for his management of the bank, has outlined a diversification strategy into asset and wealth management, but those activities still make up a relatively modest portion of Goldman’s profits.
“We continue to make significant progress in executing on our strategic priorities and are confident that the work we are doing now provides us with 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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