US economy

Goldman Sachs profit misses estimates on weak equity trading

© Reuters. FILE PHOTO: The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly

(Reuters) -Goldman Sachs Group Inc fourth-quarter profit fell nearly 13% and missed market expectations on Tuesday as weak trading activity dampened a bumper year for deals, sending the shares of Wall Street’s premier investment bank down 3%.

Goldman’s trading unit reported a lower profit in the quarter ended Dec. 31 compared to last year as a more stable economy resulted in less volatility and fewer swings in financial markets.

The global markets business, which now houses the trading business and accounts for roughly a third of overall revenue, reported revenue of nearly $4 billion, down 7%.

Compared to a strong year-ago quarter when trading volumes skyrocketed, the bank said equity underwriting revenue fell 8% in the quarter due to lower income from secondary stock offerings.

Goldman, however, reported a 45% jump in investment banking revenue to $3.80 billion as its top rainmakers raked in record fees from advising on some of the largest mergers, initial public offerings and deals involving special purpose acquisition companies.

Net earnings applicable to common shareholders fell to $3.81 billion in the quarter ended Dec. 31, from $4.36 billion the same period a year earlier. Earnings per share fell to $10.81 from $12.08 a year earlier.

Analysts on average had expected a profit of $11.76 per share, according to Refinitiv data.

Meanwhile on Friday, JPMorgan Chase & Co (NYSE:) and Citigroup Inc (NYSE:) both beat analyst profit estimates. While profits at JPMorgan, the country’s largest lender, were hurt by a slowdown in its trading arm, a stellar performance at its investment banking softened the impact.

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