Goldman Sachs sees big quarterly profits fall

Goldman Sachs trader A fall in bond trading contributed to the fourth quarter fall in profits

Related Stories

US investment bank Goldman Sachs has reported a big fall in quarterly profits, due largely to a reduction in bond trading revenue.

Net earnings for the three months to 31 December fell to $2.33bn (£1.43bn), down 19% compared with the same period last year.

But full-year net earnings rose 8% to $8.04bn on revenues of $34.2bn.

Rival bank Citigroup also reported results, with its profits also hit by reduced income from bond trading.

Citigroup reported adjusted net income of $2.6bn for the quarter, up from the $2.15bn a reported a year earlier but below many analysts' expectations.

JP Morgan, which reported its results on Tuesday, also reported suffering from falling or stagnant bond trading volumes.

Mortgage revenue hit

Goldman Sachs chief executive Lloyd Blankfein described the fixed-income market as "a somewhat challenging environment", as US investors prepare for higher interest rates.

Start Quote

We enter 2014 as a strong and stable institution”

End Quote Michael Corbat Citigroup chief executive

Goldman's revenue from client trading in fixed income, currencies and commodities dropped 15% in the fourth quarter to $1.72bn.

This was partly due to "significantly lower revenues in mortgages", the bank said.

But quarterly investment banking revenues rose 22% year-on-year to $1.72bn.

Net income applicable to shareholders fell to $2.25bn, or $4.60 a share, over the period, compared with $2.83bn, or $5.60 a share, in the same quarter in 2012, the bank said.

The bank paid out $12.6bn in pay and bonuses over the year, down 3% compared with 2012.

Looking forward, Mr Blankfein said: "We believe that we are well positioned to generate solid returns as the economy continues to heal and provide considerable upside for our shareholders as conditions materially improve."

'Substantial progress'

Citigroup saw its overall revenues fall 2% to $17.9bn for the fourth quarter, due in part to a decline in mortgage loan refinancing volumes.

Fixed-income revenues fell 15.5% to $2.3bn, but a rebound in the stock market meant investment banking revenues rose 3% to just over $1bn.

In a statement Citigroup's chief executive Michael Corbat admitted that his bank "didn't finish the year as strongly we would have liked", but said it has still made "substantial progress".

"We enter 2014 as a strong and stable institution," he said.

Shares in Citigroup fell more than 4% as the markets opened on Wall Street. Goldman Sachs shares rose 0.4%.

More on This Story

Related Stories

From other news sites

* May require registration or subscription

The BBC is not responsible for the content of external Internet sites

More Business stories



From BBC Capital


  • Kinetic sculpture violinClick Watch

    The "kinetic sculpture" that can replicate digital files and play them on a violin

Try our new site and tell us what you think. Learn more
Take me there

Copyright © 2015 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.