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Euro debt crisis impacts on Goldman Sachs Q3 results

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by Kay Mitchell
”Euro

US banking giant Goldman Sachs has today reported a fall in third quarter profits.

Goldman Sachs, which is the US’ largest investment bank, made a net loss of $393 million (£250 million) for the third quarter compared with profits of $1.9 billion a year earlier.

The bank said trading was “significantly impacted” by the euro zone debt crisis and uncertainty in the wider global economy.

Meanwhile, group-wide revenues slumped by one third to $781 million.

Chief Executive Lloyd Blankfein commented: “Our results were significantly impacted by the environment and we were disappointed to record a loss in the quarter.”

Shares were down 2% in pre-market trading.

In the meantime, Bank of America reported a profit for the third quarter. The bank posted a net income of $6.2 billion (£3.9 billion) for the three month period, boosted by asset sales and accounting gains.

Yesterday, banking giant Citigroup reported a rise in its third quarter profit. Citigroup, which is the third largest bank in the US by assets, said third quarter profit came in at $3.77 billion, or $1.23 a share, compared with $2.17 billion, or 72 cents a share, in the same quarter a year earlier.

The bank, which received two Government bailouts in 2008, said earnings were boosted due to the bank setting aside less money to cover bad loans, while revenues were lifted by an accounting gain which banks can take when markets are in turmoil.

Meanwhile, Wells Fargo said net income was $3.84 billion, or 72 cents a share, in the third quarter, versus $3.15 billion, or 60 cents a share, in the same period a year ago.

Wells Fargo, which is the biggest mortgage lender in the US, said there had been a decline in the number of loans which had turned sour – the seventh consecutive quarter this had occurred.

Finally, JP Morgan Chase last week posted a slight fall in third quarter earnings on the back of weak investment banking operations.

The bank, which is the second largest by assets, reported a profit of $4.26 billion, or 1.02 a share, compared with $4.42 billion, or 1.01 a share, a year ago.

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News posted: October 18, 2011

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