Goldman Sachs profit tumbles 24% despite bond-trading surge
Bond-trading revenue at the Wall Street giant climbed 63%
Goldman Sachs curbed the impact of lower interest rates at the end of 2019 through outsized growth in its bond-trading business, matching the playbook at its Wall Street rivals.
Fixed-income revenue climbed 63 percent to $1.77 billion in the fourth quarter, the New York-based investment bank said Wednesday, even as companywide earnings of $4.69 a share trailed the $5.56 average of estimates from analysts surveyed by Refinitiv. Companywide, net income tumbled 24 percent to $1.92 billion.
Citigroup's bond-trading revenue climbed 49 percent from a year earlier to $2.9 billion, while JPMorgan's gained 86 percent to $3.45 billion. Bank of America's bond-trading revenue was up 25 percent to $1.8 billion.
CITIGROUP PROFIT RISES, HELPED BY TRADING LIKE JPMORGAN
Goldman and its Wall Street peers have benefited from the easing of financial regulations and corporate tax cuts under the Trump administration, while grappling with corporate reluctance to make large acquisitions during a protracted and constantly shifting trade war with China.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GS | THE GOLDMAN SACHS GROUP INC. | 596.11 | +14.18 | +2.44% |
| BAC | BANK OF AMERICA CORP. | 46.46 | +0.40 | +0.87% |
| C | CITIGROUP INC. | 68.95 | +0.67 | +0.98% |
| JPM | JPMORGAN CHASE & CO. | 244.76 | +3.98 | +1.65% |
"Strong performance in the fourth quarter helped us to deliver solid results for the year, while continuing to invest in new businesses," CEO David Solomon, who succeeded longtime chief Lloyd Blankfein in the role in mid-2018, said in a statement. "We aim to drive higher returns in the future."
Revenue in the three months through December climbed 23 percent to $9.96 billion, topping Wall Street's projections of $8.54 billion.
Goldman's stock slipped 0.9 percent to $243.50 before the start of regular trading in New York, paring gains of 4.8 percent so far in 2020.