Prime News: Goldman Sachs’s Profit Hit by Trading Sump

Goldman Sachs Group Inc.’s once-strong performing bond-trading business reported a weak result for the second consecutive quarter, triggering a selloff in the firm’s shares and increasing skepticism regarding the bank’s strategy.

Goldman reported a 40 percent drop in its fixed-income trading business that puts it behind other major U.S. banks that released their quarterly results. The lender cited the weakness in almost every major fixed-income product it offers, from interest-rate driven derivatives to credit instruments.

The quarterly report will likely increase criticism that the bank did not react quickly enough to the major shift in trading trends and market conditions.

The weak performance eclipsed an unexpected earnings beat, which the lender owed to gains in its portfolio of private-equity stakes. Earnings clocked in at $3.95 per share on revenue of $7.89 billion, both surpassing analysts’ estimates.

Shares slid as investors also weighed in the shakiness at Goldman’s core. There has been a string of departures among rank-and-file fixed income sales personnel and traders in the recent months. The persisting issued in the decision are likely to increase pressure for another reshuffling.

The material has been provided by InstaForex Company – www.instaforex.com

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