Industry & Business

Goldman profit slumps after huge mortgage-backed bond settlement

Goldman profit slumps after huge mortgage-backed bond settlement

January 20
14:41 2016

Goldman Sachs Group’s profit slumped for the third quarter in a row as a $5 billion settlement of crisis-era legal claims ate into earnings in a tumultuous three months.

Goldman is the last of the big US banks to release fourth-quarter earnings.

The bank reported a 71.8% fall in net income to $574m, or $1.27 per share, from $2.03 billion, or $4.38 per share, a year earlier.

Analysts on average had expected earnings of $3.53 per share, according to Thomson Reuters.

The bank said last week that the settlement would reduce earnings in the quarter by $1.5 billion after taxes.

Goldman, like other world banks, had a tough year as oil prices plummeted, concerns about China’s economy intensified, and nervousness about the timing and pace of US interest rate increases weighed on credit markets.

The new year has also started on a grim note, with oil prices falling to their lowest in 13 years and stock prices dropping sharply around the world.

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