Goldman Sachs Trading Boom Tails Off
January 21, 2010
Goldman Sachs said Thursday morning that revenue in its trading and principal investments business fell $3.6 billion in the fourth quarter, from the third.
Total revenue in the last three months of 2010 was $6.4 billion, down from $10.0 billion in the third. That compares, however, to negative revenue of $4.4 billion in the fourth quarter of 2008, as fixed-income business plunged in the wake of the credit crisis.
This year, the fixed-income business has recovered, reaching $6.0 billion in the third quarter. But that fell to $4.0 billion in the fourth. Equities trading fell to $1.0 billion in the quarter, down from $1.8 billion in the third.
A year ago, the fixed income business was in negative territory, to the tune of $3.4 billion. Equities trading was at $1.3 billion in the last quarter of 2008.
For the full year, Goldman's trading business nearly quadrupled, however. Overall, its trading and its principal investments accounted for $34.4 billion or three-fourths of the company's overall $45.2 billion in revenue.
That compares to $9.1 billion or two-fifths of the company's 2008 revenue of $22.2 billion.
"Despite significant economic headwinds, we are seeing signs of growth,'' the company's chairman, Lloyd C. Blankfein, said.
Revenue in its asset management and securities services business though fell for the full year, from $8.0 billion in 2008, to $6.0 billion in 2009.
Investment banking revenue also fell, from $5.2 billion, to $4.8 billion.
These picked up in the fourth quarter. Investment banking revenues reached $1.6 billion, up from $899 million in the third; Asset management and securities services hit $1.1 billion, up from $974 million.
Goldman's shares were set to open trading on the New York Stock Exchange at $167.79 a share.
The company planned to discuss its results on an earnings call at 11 a.m.
