Goldman Sachs Group reported that net profit for the third quarter declined 44 percent from last year, reflecting a 12 percent drop in net revenues, 17 percent rise in operating expenses and higher provisions for bad loans.
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In Tuesday's pre-market trading, GS is currently trading at $312.00, up $5.29 or 1.72 percent.
"Goldman Sachs' third quarter results reflect the strength, breadth and diversification of our global franchise. Against the backdrop of uncertainty and volatility in the markets, we continue to prudently manage our resources and remain focused on risk management as we serve our clients," said Chairman and CEO David Solomon.
For the quarter, net earnings applicable to common shareholders declined to $2.96 billion or $8.25 per share from $5.28 billion or $14.93 per share in the prior-year quarter.
Provision for credit losses for the quarter was $515 million, compared to a $175 million last year, primarily reflected consumer portfolio growth, net chargeoffs and the impact of continued broad concerns on the macroeconomic outlook.
Total operating expenses were $7.70 billion for the quarter, 17 percent higher than last year, reflecting higher compensation and benefits expenses, higher net provisions for litigation and regulatory proceedings and higher transaction based expenses.
Total net revenues for the quarter declined 12 percent to $11.98 billion from $13.61 billion in the same quarter last year, reflecting significantly lower net revenues in Asset Management and Investment Banking, partially offset by higher net revenues in Global Markets and Consumer & Wealth Management. Analysts expected revenue of $11.41 billion for the quarter.
Net interest income grew 31 percent to $2.04 billion, while non-interest income declined 18 percent to $9.93 billion in the year-ago quarter.
Quarterly net revenues in Investment Banking were $1.58 billion, 57 percent lower than last year, reflecting significantly lower net revenues in underwriting, Financial advisory and Corporate lending. ■