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Thursday, June 24, 2021

Goldman Sachs and Bank of America cut profits

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Manish Saini
Manish works as a Journalist and writer at Revyuh.com. He has studied Political Science and graduated from Delhi University. He is a Political engineer, fascinated by politics, and traditional businesses. He is also attached to many NGO's in the country and helping poor children to get the basic education. Email: Manish (at) revyuh (dot) com

The euphoria of Wall Street with the results yesterday of JPMorgan and Citigroup, which beat forecasts, have not been able to continue with Goldman Sachs, which has disappointed the market by earning less than estimated.

The bank has earned 1,920 million dollars in the fourth quarter of 2019, 24% less than a year ago and below analyst projections. Revenues, on the other hand, rose to almost 10 billion dollars, up 23%.

In the full year, Goldman Sachs net results have fallen by 19%, to $ 8.4 billion, with revenues stagnant at $ 36.5 billion. The investment banking division reduced revenues by 9% during the year. Goldman Sachs is trying to boost its diversification.

Part of the benefit cut in the final stretch of 2019 is explained by an extraordinary provision of 1,240 million dollars aimed at resolving legal disputes related to the case of corruption of the Malaysian 1MDB fund, in which two former directors of the bank are involved.

Goldman Sachs tries to reach an agreement with the US authorities to end the controversy, which is marking the mandate of David Solomon at the head of the entity. Solomon took the reins at the end of 2018, replacing veteran Lloyd Blankfein.

Bank of America, on the other hand, has also cut profits in the fourth quarter, to around 7,000 million, 4% less. However, the figure was above the forecasts. Revenue fell slightly, to $ 22.350 million, but also exceeded expectations.

From January to December, the bank has earned 2.5% less, up to $ 27.4 billion, and has kept revenue flat at 91.2 billion.

Bank of America results have suffered from the three cuts in interest rates applied by the Federal Reserve (Fed) in 2019.

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