Goldman Sachs reported its largest earnings miss in a decade, amidst revenue decrease and higher-than-expected loan loss provisions.
The bank’s fourth quarter earnings came in at $3.32 per share, -39% below the $5.48 expected by analysts polled by Refinitiv. That implies the biggest EPS miss since October 2011 (based on Refinitiv data).
Revenue was $10.59 billion in the quarter vs. $10.83 billion expected by analysts polled by Refinitiv.
Investment banking fees fell -48% to $1.87 billion on softening issuance activity in equity and debt markets and lower advisory fees. The bank’s deals backlog was smaller compared with the third quarter.
Asset & Wealth Management segment’s revenue was down -27% from a year earlier to $3.56 billion on reduced gains on private equity holdings and markdowns in debt instruments.
Goldman had $972 million provision for credit losses in the quarter, which is 50% more than analysts had expected for the quarter. The figure is also higher compared with $344 million a year earlier, as the bank set aside more money for potential losses in credit card and point-of-sale loan portfolios.