Goldman sees trade revenues tumble

The biggest US investment bank by assets reported earnings of $1.05bn (£651m), or $1.85 per share. Analysts on average expected $2.27 per share.

A year earlier, adjusted for special charges, Goldman earned $2.75 per share.

Trading in fixed income, currency and commodities dropped far more than analysts expected, hurt by slowing market activity because of weak economic growth and regulatory uncertainty.

Revenue in that division declined a bigger-than-expected 53 per cent to $1.6bn. It was the sixth consecutive quarter of FICC trading declines.

Overall revenue declined 17.6 per cent to $7.3bn, well short of analysts’ average forecast of $8.1bn.

Operating expenses were down 23.3 per cent.

Goldman chief executive Lloyd Blankfein called the results in some of the bank’s divisions “disappointing”.

In a statement, he added: “The operating environment was more difficult given global macro-economic concerns.”

Goldman Sachs also said its commodities trading risk rose only slightly in the second quarter as it faced uncertain and less liquid markets.

Value at Risk (VaR) for commodities at Goldman averaged $39m per day in the second quarter, up 5 per cent from the $37m reported in the first quarter, latest financial results showed.