Goldman Sachs has posted a 42% fall in Q1 2022 profits, as poor investment banking and asset management metrics outweighed robust performance at its wealth management and trading units.
The US investment bank’s net income totalled $3.9bn in the three-month period to 31 March 2022, compared with $6.8bn recorded in the same quarter a year ago.
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Diluted earnings per common share (EPS) for Q1 2022 were $10.8 as against $12.08 in the first quarter of 2021.
Net revenues dropped 27% to $12.9bn from $17.7bn during this period.
However, net interest income slightly rose to $1.82bn from $1.48bn in Q1 2021.
The bank’s operating expenses reduced 18% in the quarter, majorly due to lower spending on compensation and benefits.
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By GlobalDataFor the January-March 2022 quarter, annualised return on average common shareholders’ equity (ROE) was 15% while annualised return on average tangible common shareholders’ equity (ROTE) stood at 15.8%.
Provision for credit losses totalled $561m in the first quarter of 2022, compared with $70m in the prior year.
Goldman Sachs’ global markets segment registered net revenue of $7.87bn, a 4% increase from $7.58bn in the same quarter last year.
The unit’s performance was driven by a 21% jump in fixed income revenue.
Net revenues at the bank’s investment banking unit plummeted 36% to $2.4bn from $3.7bn in the year ago-period due to significantly lower net revenues in underwriting.
Net revenues in asset management division were $546m, 88% lower than Q1 2021. In Consumer & Wealth Management, net revenues grew 21% to $2.1bn.
Goldman Sachs CEO chairman and CEO David Solomon said: “It was a turbulent quarter dominated by the devastating invasion of Ukraine. The rapidly evolving market environment had a significant effect on client activity as risk intermediation came to the fore and equity issuance came to a near standstill.
“Despite the environment, our results in the quarter show we continued to effectively support our clients and I am encouraged that our more resilient and diversified franchise can generate solid returns in uncertain markets.”
Goldman Sachs recently concluded its previously announced takeover of Dutch asset manager NN Investment Partners.
