Wall Street’s slowdown cuts into Goldman’s 2Q profits

NEW YORK (AP) — Investment banking giant Goldman Sachs saw its second-quarter profits fall nearly half from a year ago, as turmoil in the financial markets and warnings of a possible recession caused the bank’s deal-making business to slow down considerably.

The New York-based bank said Monday that it earned a profit of $2.77 billion, or $7.73 a share, in the three months ended in June compared to a profit of $5.35 billion, or $15.02 a share, in the same period a year earlier. Goldman was the latest of the big banks that have reported big declines in their profits compared to 2021.

Goldman’s profit decline came almost entirely from the global economic uncertainty and the slowdown in deal-making happening at most banks. Investment banking revenues were down 41% from a year ago, as fees from taking companies public and helping them issue fresh debt nearly evaporated in the quarter.

The bank also wrote down the value of its own investment portfolio, reflecting the declines in stocks and other asset prices last quarter as the stock market had its worst quarterly performance since the Great Recession.

Goldman’s trading desks were able to make up for some of the losses in the bank’s other divisions. Trading revenues on Goldman’s fixed income, currencies and commodities desks were up 32% from a year earlier.

Total revenues across the firm were $11.86 billion, down from $15.39 billion a year ago.

Goldman shares rose 3% in morning trading.