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US-BANKING-EARNINGS
Goldman Sachs profits top forecasts as legal costs rise
NEW YORK, Jan 16, 2019 (BSS/AFP) – Goldman Sachs posted better-than-expected
quarterly profits despite higher legal and regulatory expenses, the company
reported Wednesday.
The investment bank notched fourth-quarter profits of $2.3 billion, after
posting a $2.1 billion in the same period of the prior year due to one-time
costs associated with US tax reform.
Revenues were about flat compared to a year earlier at $8.1 billion.
Goldman increased the funds it set aside for litigation and regulatory
proceedings to $516 million from $9 million in the year-ago period.
The investment bank has been embroiled in a scandal involving Malaysian
fund 1MDB that is the subject of numerous government probes, but the
company’s press release did not say what the funds were earmarked for.
Chief Executive David Solomon is due to provide an update on 1MDB during a
conference call later Wednesday, according to Goldman’s presentation.
Goldman joined other large banks in reporting a drop in US Treasury trading
amid heavy volatility at the end of 2018. But the overall trading division
still notched a modest revenue gain because of higher equity trading.
The firm also notched higher revenues in financial advisory services, but
lower sales in debt and equity underwriting.
“We are pleased with our performance for the year, achieving stronger top
and bottom line results despite a challenging backdrop for our market-making
businesses in the second half,” Solomon said.
Shares rose 2.7 percent to $184.78 in pre-market trading.
BSS/AFP/SR/1930 HRS