Goldman Sachs reported a 43 per cent drop in third-quarter profits as it overhauled its organisational structure in an effort to buoy the bank’s stagnating stock market valuation.
The results were better than analysts expected, while chief executive David Solomon confirmed Goldman would fold its trading and investment banking business into one unit as it shrinks from four to three divisions.
Goldman reported third-quarter net income of $3.1bn, or $8.25 a share, down from $5.4bn, or $14.93 per share in the same period last year. This was ahead of analysts’ estimates for $2.9bn, or $7.75 a share, according to consensus data compiled by Bloomberg, but was still Goldman’s fourth straight quarterly decline.
The bank is facing a prolonged slowdown in investment banking fees and markdowns of equity investments at its asset management arm.