Tough setback for Goldman Sachs as earnings plunge to 3-year low as deals dry up
Goldman Sachs posted its worst performance in three years in a stinging setback for the Wall Street giant.
The bank said profit fell 62 per cent to £835m in the second quarter of the year, the lowest level since the same period in 2020.
Like other Wall Street investment banks, Goldman has been hit by a dearth of deals and stock market floats amid concerns about the global economy.
But Chief Executive David Solomon said he has seen signs of improvement.
Depression: Goldman Sachs said profit fell 62% to £835m in the second quarter of the year, the lowest amount since the same period in 2020
“He’s definitely been feeling better over the course of the last six to eight weeks,” Solomon told analysts in a conference call.
“Obviously this is a tough quarter,” but, he added, “the atmosphere feels better.”
He said activity is picking up and clients are back in M&A talks.
But he warned that the economic context remains challenging, as loans to households and businesses deteriorate.
“This time in the business cycle creates significant headwinds for Goldman Sachs,” Solomon said.
“We are making difficult decisions that are driving the strategic evolution of the company.
“Given these two factors, it shouldn’t be surprising that we’re heading into a lower earnings period.”
