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Goldman booked a $470 million loss on the sale as the bank
rejigs its strategy after a foray into consumer banking, which
Chief Executive David Solomon had championed for years, flopped.
It is also exploring strategic options for its consumer platform
business, which has lost about $3 billion in three years,
executives told investors in February.
Goldman reshuffled its businesses last year, leaning into its
traditional mainstays of trading and investment banking, beefing
up its asset management arm and stepping back from its consumer
aspirations.
"The events of the first quarter acted as another real-life
stress test," CEO Solomon said in a statement.
Shares of the bank fell 3.6% to $327.65 in premarket trading. As
of last close, they have lost nearly 3% since March 8 when
Silicon Valley Bank unveiled its attempt to raise capital and
triggered a meltdown in banking stocks.
Goldman's profit in the quarter ended Mar. 31 fell to $3.09
billion compared with $3.83 billion a year earlier, while
earnings per share slid to $8.79 from $10.76 last year, it said
on Tuesday.
Global mergers and acquisitions activity shrank to its lowest
level in more than a decade in the first quarter of 2023,
according to data from Dealogic. That hurt Goldman's investment
banking fees by 26% to $1.58 billion.
Revenue from fixed income, currency and commodities (FICC)
trading, usually a bright spot, fell 17% to $3.93 billion, while
equity trading revenue fell 7% to $3.02 billion.
Peer JPMorgan Chase & Co had last week reported a 24% drop in
investment banking revenue. Its fixed income trading revenue was
flat, while equity trading revenue plunged 12%.
Goldman's net revenue in the quarter fell 5% to $12.22 billion.
Meanwhile, Bank of America Corp's first-quarter profit beat
market expectations as it collected hefty interest payments from
customers, while the lender's traders extended their winning
run.
(Reporting by Niket Nishant and Noor Zainab Hussain in Bengaluru
and Nupur Anand in New York; Editing by Lananh Nguyen and Arun
Koyyur)
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