(Reuters) – Goldman Sachs on Wednesday reported a sharp decline in second-quarter profit, below expectations, due to an impairment in its consumer finance fintech, while the investment banking business was hurt by lower transaction volumes.
On Wall Street, Goldman Sachs shares, however, gained 1.29% to 341.63 dollars at 3:03 p.m. GMT.
Earnings fell to $1.07 billion (954.08 million euros), or $3.08 per share, for the three months ended June 30, the bank reported on Wednesday. This is its lowest quarterly profit since the second quarter of 2020.
That figure compares to earnings of $2.79 billion, or $7.73 per share, a year earlier, while analysts had expected $3.18 per share, Refinitiv data shows.
The bank recorded an impairment of $504 million due to its GreenSky fintech and $485 million related to its consolidated real estate investments.
The bank also suffered $615 million in credit losses, including write-downs related to its consumer loans and operations.
“This quarter reflects the continued strategic execution of our objectives,” CEO David Solomon said in a statement.
“Banking and global markets delivered strong returns in an environment of low cyclical activity,” he added.
Investment banking revenue for the quarter fell 20% to $1.43 billion and trading revenue fell 26%.
Goldman Sachs said it wants to sell in three to five years about half of the commercial real estate investments on the alternative arm of its asset management.
Goldman Sachs’ results contrasted with its main Wall Street rivals whose earnings beat expectations, including JPMorgan Chase and Morgan Stanley. Leaders spoke of a resilient economy, but warned that high borrowing costs will start to weigh on demand for loans later this year.
(Reporting Niket Nishant and Noor Zainab Hussain in Bangalore and Saeed Azhar in New York; French version Lina Golovnya, editing by Kate Entringer)
Copyright © 2023 Thomson Reuters