Goldman Sachs’s fourth-quarter net income dropped 19 percent as the investment bank’s revenue from bonds, currencies and commodities trading slumped, although results comfortably topped Street views.
Goldman posted net income of $2.33 billion, compared with year-earlier net income of $2.89 billion.
Earnings per-share earnings were $4.60, while net revenue fell 4.9% to $8.78 billion. Analysts expected per-share earnings of $4.22 on revenue of $7.71 billion.
A surprisingly weak third quarter on the firm’s bond trading desks left some investors uncertain if the spate of new banking rules on capital and risk-taking had already begun to hem in large banks’ activities in ways that would make it harder for Goldman to recapture its bond-trading prowess.
The New York firm led by CEO Lloyd Blankfein has rejected those concerns, arguing that clients would take bigger risks as the markets’ direction came into focus.
Nevertheless, Goldman has sought to adapt to the new era by being more selective in how it puts its own capital at risk and charging more for buying or selling on behalf of clients in riskier securities.
Goldman’s fixed-income, currencies and commodities, or FICC, business, muddled through a difficult year.
A crucial profit engine for more than a decade, the business was hampered by a slow economic recovery, both at home and abroad, which dampened clients’ appetite for the more complex, riskier trades that have been Goldman’s calling card.
For the year, FICC trading showed revenue of $8.65 billion, down 13 percent from last year and its lowest figure since the financial crisis.
For the quarter, FICC trading revenue fell 15 percent from the year-earlier period to $1.72 billion, but jumped 38% from the third quarter.
This article originally appeared on Marketwatch.com.