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Goldman's profit plunges 65 pct.

Wednesday, January 20, 2016 - 01:06

A huge settlement over mortgage-backed bonds slammed Goldman's earnings. It marked the third straight quarter of falling earnings at Wall Street's premier investment bank. Fred Katayama reports.

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Profit plunged 65 percent at Goldman Sachs. Slamming its quarterly results: its $5 billion settlement over mortgage-backed bonds it sold just before the financial crisis. It marked the third straight quarter of falling earnings for Wall Street's premier investment bank. Revenue also fell. The sharp increase in revenue from advising on mergers and acquisitions couldn't offset the big drop in one of Goldman's strongholds - fixed income, currencies and commodities trading. The Wall Street Journal reported last week that Goldman plans to cut up to a tenth of its sales and fixed income trading jobs later in the quarter. Banks have had a tough year because of the massive slide in oil prices, concerns over interest rate hikes weighing on the credit markets, and a slowdown in China's economy. Calling its performance "noisy results," UBS analyst Brennan Hawken said, "Goldman continues to run a strong franchise but given the difficult revenue environment, we believe the shares are fully valued." Goldman shares, down 13 percent this year, added to those losses in early trading amid a broad steep selloff in the markets.

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Goldman's profit plunges 65 pct.

Wednesday, January 20, 2016 - 01:06