Goldman Sachs has missed forecasts for the first time in four years after a slump in earnings at the Wall Street giant’s powerhouse bond trading division.
The bank said total revenue for the third quarter was $6.4bn (£4.1bn), generating net income of $1.43bn, a lower figure than analysts had estimated. Fixed income trading was to blame for the fall after revenues in the division slumped 34 per cent. An 18 per cent rise in revenues from equity trading failed to offset the blow.
“We experienced lower levels of activity and declining asset prices during the quarter, reflecting renewed concerns about global economic growth,” its chief executive Lloyd Blankfein said.
Well-paid Goldmanites will also feel the pinch with compensation down to 34 per cent of revenue, or $2.35bn, compared with an average of 42 per cent for the first half of the year.
But there was a bright spot: the subtle art of deal-making practiced by well-heeled investment bankers. The company’s well stocked mergers and acquisition departments has hit a purple patch and is having the best year so far since before the financial crisis.
Revenue at the division came to $1.56bn, up 6 per cent on last year.
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