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 Goldman, the last of the big U.S. banks to release fourth-quarter
earnings, reported a 71.8 percent fall in net income applicable to
common shareholders to $574 million, or $1.27 per share, from $2.03
billion, or $4.38 per share, a year earlier.
Analysts on average had expected earnings of $3.53 per share,
according to Thomson Reuters I/B/E/S. It was not immediately clear
if the reported figures were comparable.
The bank said last week that the settlement would reduce earnings in
the quarter by $1.5 billion after taxes.
The charge, which stemmed from claims that Goldman had misled
mortgage bond investors during the financial crisis, reduced
earnings per share by $3.41.
Goldman, like other banks, had a tough year as oil prices plummeted,
concerns about China's economy intensified, and nervousness about
the timing and pace of U.S. interest rate increases weighed on
credit markets.
The new year has also started on a grim note, with oil prices
falling to their lowest in 13 years and stock prices dropping
sharply around the world.
Goldman's shares were down 0.6 percent in premarket trading.
Operating expenses for the quarter rose 38 percent to $6.2 billion
as the bank's non-compensation costs rose 64 percent.
Net revenue fell 5.4 percent to $7.27 billion due to weakness in
equities and bond trading activity.
Revenue from trading bonds, currencies and commodities (FICC) was
$1.12 billion, the lowest since the fourth quarter of 2008 during
the depths of the financial crisis in which the firm recorded losses
from investments and trading credit products.
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FICC comprised only 15 percent of overall revenue in the latest
quarter, a far cry from the days when it used to comprise 40 percent
of revenue.
Bond trading by U.S. banks has been declining since 2009, mainly due
to new rules that discourage banks from taking unnecessary risks.
Investment banking revenue - which includes income from which deals
and underwriting of bond and share offerings - rose 7.4 percent to
$1.55 billion.
Goldman ranked No. 1 in advising on both announced and completed
mergers and acquisitions globally in 2015, according to Thomson
Reuters data. (http://tmsnrt.rs/1UReeh4)
(Reporting By Sudarshan Varadhan and Richa Naidu in Bengaluru;
Editing by Ted Kerr)
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