Goldman Sachs announces its worst profit in four years
GOLDMAN SACHS posted its worst annual profit for four years after its crack team of dealmakers were left idle by a takeover slump.
The Wall Street titan’s profits for the year ending December fell by a quarter to $8.5bn (£6.7bn), the lowest annual figure since 2019.
They were laid low by investment bank fees, which dropped 16pc as global dealmaking dried up.
David Solomon, the chief executive, said he recognised markets had been difficult. “It wasn’t an ‘A’ environment for our core business. I don’t even think it was a ‘B’ environment when investment banking is operating at low levels,” he said.
“There’s no question that these capital markets and M&A [mergers and acquisitions] activity levels have been depressed. I don’t think that continues year-on-year-on-year.”
Mr Solomon took over as chief executive from Lloyd Blankfein in 2018 and made pushing into wealth and retail management a key plank of his agenda.
The strategy has slowly borne fruit. Goldman’s bright spot came in its wealth management division, which houses the Marcus retail brand best known to customers in the UK. Annual net revenues at the division rose 4pc to $13.9bn (£11bn) with a late surge in the final three months of 2023.
Mr Solomon, who said Goldman staff “worry 98pc of the time about the 2pc of things that can go wrong”, predicted an uptick in activity in Europe but sounded a warning over China.
“We are seeing more activity across Europe, particularly strategic dialogue. The one place where things are slower is obviously in Asia, with respect to China … that still seems slower, both the M&A side and the capital market side,” he said.
Wall Street rival Morgan Stanley followed Goldman’s lead yesterday with a slide in full-year profits, down 18pc to $9.1bn. New chief executive Ted Pick, who replaced James Gorman, unveiled $535m of special charges linked to ending an investigation into large stock trades and a US insurance scheme for banks following the collapse of Silicon Valley Bank.