Market Volatility Boosts Goldman Sachs' Trading Revenue, But Profit Shrinks By A Third

Goldman Sachs Group's (GS) third quarter profit shrank by about 33% to $2.06 billion or $5.47 per share due to impairments in real estate and losses from its consumer banking missteps despite a boost from higher trading revenues.

Volatile equity markets helped Goldman's equities trading revenue jump 8% to $2.96 billion but that was offset by the hit the bank took as a result of $358 million in impairments to its real estate investments. Investment banking fees saw a muted growth of 1%.

Goldman Sachs CEO David Solomon said he expects "a continued recovery in both capital markets and strategic activity if conditions remain conducive," adding that "a resurgence in activity will undoubtedly be a tailwind for Goldman Sachs."

Solomon's retail banking strategy has garnered widespread criticism for its high costs and subsequent company backpedaling. In August, the bank sold its Personal Financial Management unit to Creative Planning for an undisclosed sum. The sale, which is predicted to result in a gain, will likely close in the fourth quarter. Just last week, Goldman announced the sale of GreenSky for an expected hit to third-quarter EPS of $0.19 per share after struggling for months to find a buyer.

Goldman stock has fallen from its mid-2021 high of more than $400 per share, trading flat in premarket trading Tuesday at about $314 a share. The stock is down 9% in the last year and more than 36% since approximately the time Solomon became CEO in October 2018.