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The
bank took a writedown of $504 million tied to its GreenSky
business and $485 million related to its consolidated real
estate investments.
It reported on Wednesday a profit of $1.07 billion, or $3.08 per
share, for the quarter ended June 30, compared to $2.79 billion,
or $7.73 per share, a year earlier.
Greensky, which facilitates home improvement loans to consumers,
was acquired by Goldman in September 2021 in a $2.24 billion
stock deal, which closed a year ago.
CEO David Solomon told analysts in April that GreenSky is a
"good business" but the bank might not be the "best long-term
holder of this business" given its strategic priorities.
Goldman's asset and wealth management unit brought in 4% lower
revenue compared to last year, hurt by losses from real estate
investments.
The bank's report rounds out a strong quarter for big U.S.
banks, which pointed to a resilient economy but offered further
evidence that high borrowing costs will begin to weigh on loan
demand later this year.
Investment banking fees for the quarter fell 20% to $1.43
billion. Trading revenue for fixed income, currency and
commodities fell 26%, while equities trading revenue was broadly
unchanged.
Ten straight rate hikes by the Federal Reserve have left the
economy on a shaky ground, with many executives predicting a
slowdown in the second half of the year.
That has prevented the market for mergers and acquisitions from
roaring back to life even as it has begun to show some signs of
recovery.
On Tuesday, Goldman's peer Morgan Stanley said its investment
banking revenue was in line with last year, but the trading
business had weakened.
Analysts are optimistic that an ongoing recovery in stock
markets will encourage dealmaking and prompt more IPO hopefuls
to list their shares in the coming months.
However, uncertainty about the trajectory of the economy
continues to be a hurdle with global mergers and acquisitions
activity falling 36% from last year in the second quarter.
(Reporting by Niket Nishant and Noor Zainab Hussain in Bengaluru
and Saeed Azhar in New York; Editing by Arun Koyyur)
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