Goldman Sachs Group Inc (NYSE:GS) profit falls

Goldman Sachs Group Inc (NYSE:GS) stock fell 0.78% (As on Jan 19, 11:04:29 AM UTC-4, Source: Google Finance) after the company reported a fall in fourth-quarter profit due to weak trading activity, but a bumper year for mergers and acquisitions helped the investment bank post record full-year profits. Net earnings applicable to common shareholders fell to $3.81 billion in the quarter ended Dec. 31, from $4.36 billion the same period a year earlier. Return on average common shareholders’ equity (ROE) was 23.0% for 2021 and annualized ROE was 15.6% for the fourth quarter of 2021. Return on average tangible common shareholders’ equity (ROTE) was 24.3% for 2021 and annualized ROTE was 16.4% for the fourth quarter of 2021.

Moreover, net revenues in Investment Banking were $3.80 billion for the fourth quarter of 2021, 45% higher than the fourth quarter of 2020 and 3% higher than the third quarter of 2021. The increase compared with the fourth quarter of 2020 reflected significantly higher net revenues in Financial advisory, Underwriting and Corporate lending. The increase in Financial advisory net revenues reflected a significant increase in completed mergers and acquisitions volumes. The increase in Underwriting net revenues was due to significantly higher net revenues in Debt underwriting, primarily driven by leveraged finance and asset-backed activity, partially offset by lower net revenues in Equity underwriting compared with a strong prior year period, reflecting lower net revenues from secondary offerings. Net revenues in Global Markets were $3.99 billion for the fourth quarter of 2021, 7% lower than the fourth quarter of 2020 and 29% lower than the third quarter of 2021. Net revenues in Asset Management were $2.89 billion for the fourth quarter of 2021, 10% lower than the fourth quarter of 2020 and 27% higher than the third quarter of 2021.

GS in the third quarter of FY 22 has reported the adjusted earnings per share of $10.81, missing the analysts’ estimates for the adjusted earnings per share of $11.76, according to Refinitiv data. The company had reported the adjusted revenue growth of 8 percent to $12.64 billion in the third quarter of FY 22, beating the analysts’ estimates for revenue of $12.08 billion. The increase compared with the fourth quarter of 2020 reflected significantly higher net revenues in Investment Banking and higher net revenues in Consumer & Wealth Management, partially offset by lower net revenues in Asset Management and Global Markets.

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