Goldman Sachs profits collapse as the Wall Street giant is hit by a deal-making slump
Profits at Goldman Sachs plummeted at the start of the year as a slump in deal closing hit the Wall Street giant.
In the three months to the end of March, the investment bank said profits fell 18 per cent to £2.6 billion, with volatility in financial markets and fears for the global economy continuing to take their toll.
Data from S&P Global Market Intelligence highlighted the magnitude of the problem in the US and Canada as the total number of M&A transactions fell 21 percent to 20,965 by 2022.
While Goldman suffered from volatile markets, Bank of America (BoA) benefited from its increased exposure to consumers.
Deal slump: Goldman said earnings fell 18% to £2.6bn, with financial market volatility and global economic fears set to continue to take their toll
First quarter profit was up 15 per cent to £6.5 billion compared to the same period last year.
The results showed that the second largest US bank by market value behind JP Morgan was boosted by a 25 per cent increase in net interest income of £11.5 billion.
This is the difference between what a bank charges borrowers for loans and what a bank pays depositors to depositors.
Despite the conflicting results, deposits will be a concern for both.
Analysts had expected savers to move money from smaller lenders to larger ones after the collapse of Silicon Valley Bank and Credit Suisse last month, though that hasn’t been the case across the board.
Goldman clients raised £9.6 billion in deposits in the quarter. Deposits with BoA also fell by £16 billion to £1.5 trillion from the end of 2022.
JP Morgan reported a 2 percent rise in deposits to £1.8 trillion last week.