Goldman Sachs first quarter profits tumble more than 50%


Goldman Sachs reported a sharp decline in first-quarter earnings Tuesday, but gave a fairly bullish outlook for the mergers and acquisitions business now that financial markets have stabilized.

Earnings for the quarter ending March 31 were $1.2 billion, down 56.3 percent from the year-ago period. Revenues sank 40.3 percent to $6.3 billion.

Nearly all of the big investment bank’s business lines were battered by the turmoil that dominated global markets for the first six weeks of 2016.

Revenues from financial advisory services tumbled 20 percent to $771 million due to a sharp decline in M&A transactions.

The upheaval also depressed trading activity with net revenues in fixed income, currency and commodities trades sinking 47 percent to $1.7 billion.

Goldman offset some of these negatives by slashing employee compensation and benefits by 40 percent to $2.7 billion. Litigation and other non-compensation expenses also fell.

Chief financial officer Harvey Schwartz said the firm was heartened by improving conditions throughout the quarter, with March better than the first two months.

“It’s early in April, but it really feels like many of the factors that were affecting the first quarter, particularly early on, have abated,” he told analysts on a conference call.

“Although the market feels a little frazzled from all that, it feels for the most part like that’s behind us.”

The upheaval had a “chilling” effect on deal-making, but the M&A market right now “feels good,” he said.

“It feels like the fundamental conditions for an elevated level of merger and acquisition activity are all still in place,” he said. “Those things are challenged topline growth and slow-to-very moderate GDP growth globally.”


good..but thats only what they declare eh? 🙂

Goldman offset some of these negatives by slashing employee compensation and benefits by 40 percent to $2.7 billion. Litigation and other non-compensation expenses also fell.”

employees copping it hard..nice work GS..


~ by seeker401 on April 22, 2016.

2 Responses to “Goldman Sachs first quarter profits tumble more than 50%”

  1. Vampire squids running out of victims

  2. I wonder how long the banks in general can continue operating with little interest income coming in, few borrowers that feel they can risk debt even at these prices, and the long-term malaise we have been seeing in the Main Street economy.
    We have seen the reactions to the current situation in the form of negative interest rates, weak showings in stress tests, preparations for bail-ins, layoffs, and even some of the oldest banks on the verge of collapse (such as the oldest European bank, Monte dei Paschi di Siena).
    But the alternative is increasing interest rates & watching markets all over the world collapse due to the lack of cheap money, not to mention the default of most of the governments of the world, who are so mired in debt at this point that any increase in interest payments on that debt would destroy their ability to keep functioning…they would either default outright, or start printing dough directly from their treasuries, bypassing central bank debt & creating a tidal wave of cheap fiat money.
    I’m guessing hyperinflation is in our future, or a massive bank crash…they’ve painted themselves into a corner, so take your pick.

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