Goldman Sachs Group, the dominant US investment bank, said quarterly profit fell by more than a third as low trading volumes dragged on earnings, but it still beat Wall street estimates.
Third-quarter shareholder net income fell to $1,9-billion, or $2,98 a share, from $3,19-billion, or $5,25 a share, a year earlier.
Analysts on average expected $2,32 a share, according to Thomson Reuters.
“Even though expectations were lower and even though the EPS numbers were reduced dramatically in the past couple of weeks, it’s still a much more positive release than many of their competitors,” said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel Inc.
New York-based Goldman has found itself in the crosshairs of regulators this year, first defending against fraud charges from the US Securities and Exchange Commission, and then preparing to reshape trading businesses to comply with the Financial Regulation Reform Bill.
Trading profits, which motored Goldman’s rebound from the financial crisis, have weakened.
Goldman reported net revenues in fixed income, currency and commodities of $3,77-billion, down 37% from a year ago. The firm attributed the drop to a challenging environment in which activity levels dropped significantly.
Equities trading net revenues were $1,05-billion, down 43%.
A bright spot in the earnings was Goldman’s investment banking division, which reported net revenues of $1,12-billion, up 24%.
Goldman, which has faced a backlash over its pay practices, set aside $3,83-billion for compensation in the third quarter, bringing its total pool to $13,12-billion for the year, down 21% from a year ago. — Reuters