Goldman Sachs 3Q profits fall 33% as trading, investment banking remains stagnant

NEW YORK (AP) — Goldman Sachs saw its third-quarter earnings fall 33%, with the investment bank seeing muted market conditions that allowed fewer deals and market making opportunities for the firm.

The bank also saw a notable rise in expenses in the quarter, as the bank had to write down its investment in lending platform GreenSky as well as its real estate investments.

The New York-based firm had earnings of $2.06 billion, or $5.47 a share, down from a profit of $3.07 billion, or $8.25 a share, in the same period a year ago.

Analysts had low expectations for Goldman this quarter, with sluggish markets and the firm announcing earlier this year that it was pulling out of its nascent consumer lending business. The bank is selling off its GreenSky business, which the bank had to write off this quarter.

“We’re confident that the work we’re doing now provides us a much stronger platform for 2024,” said David Solomon, chairman and CEO, in a statement.

Goldman has struggled in the past year as fewer businesses have sought to do deals amid higher inflation and geopolitical uncertainty, and market conditions have been tougher this year compared to last.

The bank saw a 1% rise in investment banking revenues from last year, and its trading business of bonds, currencies and commodities was down 6% in the period. Equities trading was up 8%.

The bank's return on equity, a measurement on how well an investment bank is performing with the assets they hold, was 7.1% in the quarter. Historically in the past decade or so, banks like Goldman aim to get that measurement above 10%.