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Wall Street’s slowdown hits Goldman’s 2Q profits

APt
Goldman Sachs’ second-quarter profits almost halved from a year ago, as turmoil in the financial markets and warnings of a possible recession caused the investment banking giant’s deal-making business to slow considerably.

Total revenues across the firm were $US11.86 billion, down from $US15.39 billion a year ago. AP
The New York-based bank reported on Monday a profit of $US2.77 billion, or $US7.73 a share, in the three months through June. That compared to a profit of $US5.35 billion, or $US15.02 a share, in the same period a year earlier. Goldman was the latest of the big banks to have reported lower profits.

Goldman’s profit decline came almost entirely from the global economic uncertainty and the slowdown in deal-making happening at most banks. Investment banking revenues were down 41 per cent from a year ago, as fees from taking companies public and helping them issue fresh debt nearly evaporated in the quarter.

The bank also wrote down the value of its own investment portfolio, reflecting the declines in stocks and other asset prices last quarter amid the worst quarterly performance for the stock market since the Great Recession.

Goldman’s trading desks were able to make up for some of the losses in the bank’s other divisions. Trading revenues on fixed income, currencies and commodities desks were up 32 per cent from a year earlier.