Goldman Sachs earnings hit by hefty legal charge

AFP, NEW YORK: Goldman Sachs reported a big drop in earnings on Wednesday as hefty legal expenses and lower trading revenues more than offset the gains from strong merger advising activity.
Earnings for the fourth quarter dropped about 71.8 per cent to $574 million.
Revenues fell 5.4 per cent to $7.3 billion.
Profits were hit by a $1.8 billion charge to settle US litigation on allegations the investment bank fraudulently marketed mortgage bonds to investors before the financial crisis.
Goldman announced last week it had reached a tentative $5.1 billion deal with regulators to settle the litigation.
Goldman said revenues from trading in its fixed income, currency and commodities investments fell eight per cent to $1.1 billion compared with the year-ago period. The results were marred by a “challenging environment generally characterized by difficult market-making conditions,” it said.
Revenues from equities trading fell nine per cent to $1.8 billion, reflecting low trading volumes.
On the positive side, Goldman notched a 27 per cent gain in financial advisory revenues behind brisk merger and acquisition activity.
“We are pleased that our diversified business mix allowed us to deliver solid results in a year characterized by uneven global economic activity,” said Goldman chief executive Lloyd Blankfein.

Goldman Sachs earnings hit by hefty legal charge

AFP, NEW YORK: Goldman Sachs reported a big drop in earnings on Wednesday as hefty legal expenses and lower trading revenues more than offset the gains from strong merger advising activity. Earnings for the fourth quarter dropped about 71.8 per cent to $574 million. Revenues fell 5.4 per cent to $7.3 billion. Profits were hit by a $1.8 billion charge to settle USlitigation on allegations the investment bank fraudulently marketed mortgage bondsto investors before the financial crisis. Goldman announced last week it had reached a tentative $5.1 billion deal with regulators to settle the litigation. Goldman said revenues from trading in its fixed income, currency and commodities investments fell eight per cent to $1.1 billion compared with the year-ago period. The results were marred by a challenging environment generally characterized by difficult market-making conditions, it said. Revenues from equities trading fell nine per cent to $1.8 billion, reflecting low trading volumes. On the positive side, Goldman notched a 27 per cent gain in financial advisory revenues behind brisk merger and acquisition activity. We are pleased that our diversified business mix allowed us to deliver solid results in a year characterized by uneven global economic activity, said Goldman chief executive Lloyd Blankfein.