Goldman Sachs Group’s profit plunged as the Wall Street company reported one of its weakest quarters in terms of profitability under chief executive David Solomon.
Earnings fell 58 per cent on an investment-banking slump, property markdowns and a goodwill write-down in the consumer business, which houses the GreenSky lending business.
Return on equity, a key measure of profitability, slid to 4 per cent in the quarter, the worst among the top US banks.
The company had been actively tamping down expectations heading into the report, prompting analysts to slash their estimates for quarterly profit by almost half since mid-June.
Its shares fell by 2 per cent in early New York trading.
Goldman’s management has been working to smooth the company’s sometimes volatile quarterly results, which featured big gains during the post-coronavirus boom followed by a run of missed profitability goals.
Investors are looking to see whether the second quarter represents a trough for the New York-based company, with a steadier run of earnings gains ahead.
Equities trading was one bright spot, coming in ahead of its major rivals at $3 billion in revenue, compared with estimates for $2.47 billion.
Goldman’s asset-and wealth-management business posted revenue of $3.05 billion, down 4 per cent from a year earlier. Analysts predicted revenue of $3.5 billion for the division.
The unit was buffeted by the bank’s exposure to the property sector, with write-downs both on its lending portfolio and its equity investments contributing to a $1.15 billion pretax earnings hit tied to its principal investments.
Unlike most of its major competitors, Goldman has aggressively used its own balance sheet to make investments, a strategy that can lead to big swings in results.
The lender has been looking to rely more on fees from investing money for other institutions.
The bank also reported a jump in operating expenses due to how it accounts for impairments tied to some of its consolidated real estate investments, as well as the goodwill write-down. The impairments stood at about $1 billion.
Goldman has been pursuing the sale of its GreenSky business slightly over a year after completing its purchase – one of the most visible signs of how management has backtracked on the pursuit of its retail-banking strategy in the past year.
* Fixed-income traders brought in $2.71 billion, down 26 per cent. Expectations were for $2.81 billion.
* Investment-banking revenue of $1.43 billion fell short of the average analyst estimate of $1.51 billion. Equity underwriting climbed from a year earlier and advisory fees plunged. Bankers have cautioned that even when deal-making rebounds, the low volume of announced mergers so far this year could keep the pressure on through the rest of the year.
* Revenue dropped 8 per cent to $10.9 billion, compared with analyst estimates of $10.5 billion.
* Total assets under supervision increased to a record $2.71 trillion, up from $2.67 trillion as of March 31.
Zimbabwe v UAE, ODI series
All matches at the Harare Sports Club:
1st ODI, Wednesday, April 10
2nd ODI, Friday, April 12
3rd ODI, Sunday, April 14
4th ODI, Tuesday, April 16
UAE squad: Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Mohammed Usman, CP Rizwan, Chirag Suri, Mohammed Boota, Ghulam Shabber, Sultan Ahmed, Imran Haider, Amir Hayat, Zahoor Khan, Qadeer Ahmed
La Mer lowdown
La Mer beach is open from 10am until midnight, daily, and is located in Jumeirah 1, well after Kite Beach. Some restaurants, like Cupagahwa, are open from 8am for breakfast; most others start at noon. At the time of writing, we noticed that signs for Vicolo, an Italian eatery, and Kaftan, a Turkish restaurant, indicated that these two restaurants will be open soon, most likely this month. Parking is available, as well as a Dh100 all-day valet option or a Dh50 valet service if you’re just stopping by for a few hours.
Company profile
Name: Infinite8
Based: Dubai
Launch year: 2017
Number of employees: 90
Sector: Online gaming industry
Funding: $1.2m from a UAE angel investor
The specs
Engine: 4 liquid-cooled permanent magnet synchronous electric motors placed at each wheel
Battery: Rimac 120kWh Lithium Nickel Manganese Cobalt Oxide (LiNiMnCoO2) chemistry
Power: 1877bhp
Torque: 2300Nm
Price: Dh7,500,00
On sale: Now
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
COMPANY%20PROFILE
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WIDE%20VIEW
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Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
What is the Supreme Petroleum Council?
The Abu Dhabi Supreme Petroleum Council was established in 1988 and is the highest governing body in Abu Dhabi’s oil and gas industry. The council formulates, oversees and executes the emirate’s petroleum-related policies. It also approves the allocation of capital spending across state-owned Adnoc’s upstream, downstream and midstream operations and functions as the company’s board of directors. The SPC’s mandate is also required for auctioning oil and gas concessions in Abu Dhabi and for awarding blocks to international oil companies. The council is chaired by Sheikh Khalifa, the President and Ruler of Abu Dhabi while Sheikh Mohamed bin Zayed, Abu Dhabi’s Crown Prince and Deputy Supreme Commander of the Armed Forces, is the vice chairman.
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
The specs: 2018 Mercedes-Benz E 300 Cabriolet
Price, base / as tested: Dh275,250 / Dh328,465
Engine: 2.0-litre four-cylinder
Power: 245hp @ 5,500rpm
Torque: 370Nm @ 1,300rpm
Transmission: Nine-speed automatic
Fuel consumption, combined: 7.0L / 100km
COMPANY%20PROFILE
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