Goldman Sachs reports 11% fall in profits

| June 17, 2008 | 0 Comments

US investment banking giant, Goldman Sachs, has announced an 11% fall in quarterly profit.

However, the results were below analysts’ expectations and the company’s share price saw a boost after the news.

In the quarter to the end of May, Goldman reported net income of $2.09 billion (£1.1 billion), compared with $2.33 billion a year ago.

While its business has slowed, Goldman experienced a strong performance in commodities, hedge funds and asset management which helped offset losses relating to bonds.

Unlike many investment banks, Goldman correctly predicted that the value of mortgage bonds would decline. This helped it avoid the fallout from the collapse in the US sub-prime mortgage market.

Commenting on the results, Goldman’s chairman and chief executive, Lloyd Blankfein, said they were pleased to report strong results for the quarter despite the difficult market conditions.

According to Thomas Russo, partner and portfolio manager at Gardner, Russo & Gardner, Goldman Sachs have an uncanny ability to stay out of trouble.

Yesterday, investment bank Lehman Brothers reported a quarterly loss of $2.8 billion, it was the bank’s first loss since it was de-merged from American Express in 1994. Already this year, Lehman Brothers has seen its shares fall by over 50% on fears about its exposure to the mortgage market.

It is expected that Morgan Stanley will record a 59% fall in its second-quarter profit when its results are announced on Wednesday.

Tags: , , investment banks

Comments (0)

Trackback URL | Comments RSS Feed

There are no comments yet. Why not be the first to speak your mind.

Leave a Reply

Visited 2044 times, 1 so far today