Goldman Sachs

Goldman Sachs reported its biggest earnings miss in 10 years as profits slumped 66% y/y to $1.33 billion, or $3.32 per share, about 39% below analyst estimates. Revenue was down 16% y/y to $10.59 billion.
The decrease, compared with the fourth quarter of 2021, primarily reflected significantly lower net revenues in Asset & Wealth Management and lower net revenues in Global Banking & Markets.
Additionally, expense and loan loss provisions came in much higher than expected. Credit loss provisions were 50% higher than estimates, with Goldman citing early signs of consumer credit deterioration as a reason for this.
Operating expenses jumped 11% y/y to $8.09 billion, due to higher compensation, benefits and transaction-based fees. This was around $800 million more than analysts had expected.
The bank also suffered from its loss-making foray into the retail market as well as falling investment banking revenues, as post-pandemic deal-making activity dried up. The Apple Card account Goldman won in 2019 has also proven less profitable than was expected.
This was a poor set of results by the bank as it posted an 11% return on equity (ROE), far below the target range of 15% to 17% it set itself.
Goldman Sachs let go of 3,200 employees last week, representing around 6.5% of its workforce, as it faces a challenging economic backdrop .
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