Goldman Sachs Announce Q4 Profits

by Stewart Douglas

Story link: Goldman Sachs Announce Q4 Profits

Leading investment bank Goldman Sachs has today announced an increase in profits over the last quarter of the year, with earnings overall growing by 2% off the back of strong investment banking divisions and growth in its financial consultancy services over the period.

Goldman have enjoyed a prosperous summer after selling their exposure to the sub-prime sector prior to its collapse after predicting the problems that would arise with interest rate rises at the US Federal Reserve, giving it the competitive advantage over its rivals that continued to to hold exposure to the sub-prime sector over the period.

According to the financials announced today, profits to December for the last quarter had increase from $3.15 billion to $3.22 billion over the year, reflecting steady annual growth on a matched quarter basis.  Unlike its rivals, Goldman’s profits have not been subject to writedowns from worthless sub-prime exposure, which has no doubt helped ensure its continued growth.

Revenues over the course of the quarter were also up to almost $11 billion from $9.5 billion the year previous, reflecting a growth in revenue streams despite the awkward market conditions over the period caused by the fall out from the sub-prime sector and the credit crunch.

The news comes just one week after major rival investment bank Lehman Bros announced a 12% drop in its revenues over the course of the fourth quarter as a result of substantial forced writedowns.

“It was a very solid quarter across the board,”
said analyst David Honold, citing the overall growth across the division as securing the firm’s expansion plans for the next twelve months.

Goldman Sachs today said it was looking to expand further into the ‘global economy’, suggesting it may look to diversify its geographic reach further in the coming years to further cement revenues.