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Goldman Sachs profit falls in first quarter as dealmaking sputters

Goldman booked a $470 million loss on the sale as the bank rejigs its strategy after a foray into consumer banking, which Chief Executive David Solomon had championed for years, flopped

Goldman Sachs

Goldman Sachs (Photo: Reuters)

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Goldman Sachs Group Inc's first-quarter profit fell 19% as sluggish dealmaking eroded the Wall Street giant's fees from investment banking, while a partial sale of the loan portfolio of its consumer unit Marcus weighed on the results.
 
Goldman booked a $470 million loss on the sale as the bank rejigs its strategy after a foray into consumer banking, which Chief Executive David Solomon had championed for years, flopped.
 
It is also exploring strategic options for its consumer unit, which lost about $3 billion in three years, executives told investors in February.
 
Goldman reshuffled its businesses last year, leaning into its traditional mainstays of trading and investment banking, beefing up its asset management arm and stepping back from its consumer aspirations.
 
"The events of the first quarter acted as another real-life stress test," CEO Solomon said in a statement. Goldman shares were down nearly 3% at $329 in premarket trading.
 
Profit fell to $3.09 billion in the quarter ended Mar. 31 compared with $3.83 billion a year earlier, while earnings per share slid to $8.79 from $10.76 last year, the bank reported on Tuesday.
 
Global mergers and acquisitions activity shrank to its lowest level in more than a decade in the first quarter of 2023, according to data from Dealogic. That hurt Goldman's investment banking fees by 26% to $1.58 billion.
 
Net revenue in the quarter fell 5% at $12.22 billion.
 

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First Published: Apr 18 2023 | 5:35 PM IST

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