Goldman Sachs Group missed quarterly profit expectations on Tuesday as weak trading activity and rising expenses blighted the gains from a record-breaking M&A boom, sending the shares of Wall Street's premier investment bank down more than 8%.
The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kellymissed quarterly profit expectations on Tuesday as weak trading activity and rising expenses blighted the gains from a record-breaking M&A boom, sending the shares of Wall Street's premier investment bank down more than 8%.
Goldman's performance was also marred by higher special charges of $432 million, mostly related to provisions for litigation and a reserve build of $213 million.Wage inflation has also crimped banks' profits as America's top lenders are forced to raise salaries for junior bankers over the past year to retain top talent.
Goldman's operating expenses jumped 23%, mainly due to higher compensation and benefits costs. Last week, JPMorgan's top executives flagged similar high expenses and said the lender was ready to splurge on compensation to win the talent war against rival banks. Its earnings per share is expected to drop from $59 in 2021 to $41 in 2022, as per consensus estimates and so "it is not as though the world doesn't understand that 2021 was a unique and likely unrepeatable year", Kotowski said.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Goldman Sachs profit drops below Wall Street expectationsWall Street firm's fourth-quarter results fall short as its asset management and global markets units weighed, while investment banking, asset management rose.
Read more »
Goldman Sachs Sees Profit Slip 13%Trading revenue fell in the fourth quarter, though the bank continued to benefit from ebullient deal making.
Read more »
Goldman Sachs Shares Decline After Fourth-Quarter Earnings Miss EstimatesAmid rising rates and slowing markets, how will CEO David Solomon navigate the next phase?
Read more »
Goldman Sachs has a bunch of new buy-rated stocks — and says 5 have upside of more than 90%Goldman Sachs' analysts have given 49 stocks a 'buy' rating since January, and expect five of them to rally over 90% this year.
Read more »
Goldman Sachs Sees Profit Slip 13%Trading revenue fell in the fourth quarter, though the bank continued to benefit from ebullient deal making.
Read more »
Renault's higher-value brands focus pays off in 2021A solid performance by Renault's higher-value brands helped soften an overall drop in annual worldwide group sales at the French carmaker, as its focus on more profitable models pays off.
Read more »