A second straight quarter of real estate writedowns and a continued dealmaking slump dented the Wall Street firm’s profitability.
Net income was $US2.06 billion in the third quarter, down 33 per cent from a year earlier.Goldman Sachs Group posted a second straight quarter of real estate writedowns and a continued dealmaking slump, leaving the firm’s profitability at about half the level it’s targeting.
“I think you can get very comfortable with the mid-teens target” for return on equity, Solomon said on a conference call with analysts. “We continue to be very optimistic about our view to deliver meaningfully higher returns to our shareholders.” Goldman boosted the portion of revenue it pays out to workers in the third quarter, taking its closely watched ratio to 34.5 per cent so far this year. That means an extra $US690 million over 2022’s pace. This time last year, the firm dragged down the ratio amid losses from its consumer unit, a move it later had to reverse.
Investment-banking revenue of $US1.56 billion compared to analysts’ average estimate of $US1.54 billion. Equity and debt-underwriting revenue climbed from a year earlier even as advisory fees remained depressed. Goldman led a flurry of initial public offerings last month, raising hopes of a revival in IPOs and dealmaking. But executives have since set a more cautious tone about when markets would return to a more normal pace.
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