Weak trading results in Goldman Sachs earnings to drop

Goldman Sachs has set aside more funds for bad loans. (Reuters pic)

NEW YORK: Goldman Sachs reported a drop in first-quarter earnings on declines in its trading business and as it set aside more funds for bad loans in its growing consumer business.

The financial giant saw net income plunge to US$2.1 billion, down 20.3% from the same period of last year.

At the same time revenues fell 12.7% to US$8.8 billion.

Goldman encountered sharp declines in key trading divisions, such as equities and bonds.

Market conditions improved from the prior quarter, but volatility was low, crimping activity, the investment bank said.

A bright spot was financial advising for mergers and acquisitions where it scored a boost in revenues, while underwriting revenues fell.

Goldman, which has ramped up its consumer lending business through its online savings accounts, credit cards and other ventures, set aside US$224 million for credit losses.

“We are pleased with our performance in the first quarter, especially in the context of a muted start to the year,” said Chief Executive David Solomon.

“We are focused on new opportunities to grow and diversify our business mix and serve a broader range of clients globally.”

Goldman’s share prices rose 0.2% to US$208.22 in pre-market trading.