Goldman Sachs Reports Steep Fall in Profit, Highlighting Bank’s Woes

Goldman Sachs reported a profit of $1.1 billion in the second quarter, down more than 60% from a year earlier.

The bank specifically highlighted write-downs on the value of its commercial property portfolio, which squeezed $1.2 billion in profits, and buy-now-pay-later firm GreenSky deducted nearly $700 million from its profits. emphasized. Goldman acquired GreenSky less than two years ago as part of its ill-fated foray into consumer finance.

Quarterly revenue was $10.9 billion, down 8% year-over-year.

The bank had 44,600 employees at the end of June, down 2,400 from the same period last year. Goldman has had at least three job cuts this year, with its workforce down 8% so far this year.

This appears to have been a Band-Aid rip-off quarter for Goldman. Property write-downs, in particular, appeared to factor in potential losses in the period.

However, there are good reasons for this move. Remote and hybrid work is likely to continue, with dark implications for office spaces and landlords in many cities. Goldman, which has already admitted some losses in that area, can now turn its attention to other areas of its business.

“This quarter reflects the continued strategic execution of our goals,” Goldman CEO David Solomon said in a statement.

The big question for Mr. Solomon is whether he can convince investors, and many within the company, to return to the feared old Goldman.

Unlike diversified financial institutions such as JPMorgan Chase & Co., Goldman Sachs is heavily dependent on Wall Street franchises, and business activity has languished in the face of economic uncertainty, rising interest rates and other factors. . This means there may be little banks can do to completely self-isolate in the event of a protracted downturn in trading.

It’s been almost a year since the bank issued a broad apology for the plight of its consumers, including at one point its eponymous consumer arm, Marcus.

The bank is still unwinding its business, has losses and expects more ugly headlines until it is done.

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