The good news is Goldman Sachs is not going bust. The bad news the firm has posted a 70% drop in fiscal third-quarter net income, reports Wall Street Journal.
However, Goldman can heave a sigh of relief since the decline in profits it recorded is not as serious as what Lehman did in third quarter. Lehman had $4 billion losses after a new $5-billion write downs on account of mortgage exposures.
Goldman, which is one of the two remaining major independent investment banks in the US. – the other one being Morgan Stanley – said it earned $845 million, or $1.81 a share in the quarter, compared to $2.09 billion, or $4.58 a share a year ago.
Total revenues declined 43%, to $13.63 billion from $23.8 billion a year ago.
Goldman’s rival Lehman Brothers on Monday filed for protection under chapter 11 of bankruptcy law in US courts. The other large bank Merrill Lynch has been sold to Bank of America
Goldman Sachs’ Chief Executive Lloyd C. Blankfein said his firm is “well-positioned” to meet clients’ needs and “act on the right market opportunities.” He termed it “solid” results.