Goldman Sachs profit hit by lower bond trading revenue
(REUTERS) - Goldman Sachs Group Inc reported a 21 per cent drop in quarterly profit on Thursday as revenue from fixed-income trading fell in what Chief Executive Lloyd Blankfein described as "a somewhat challenging environment."
The bank's bond trading revenue slid 11 per cent, adjusted for an accounting charge, and was greater than those of competitors that have already posted fourth-quarter results. It is also a blow to a bank that counts bond trading, including fixed income, currency, and commodities, as one of its biggest businesses.
The bond market began to soften in the middle of last year as investors prepared for the US Federal Reserve to scale back on its bond-buying stimulus, and longer-term yields started rising. Trading income across Wall Street has been hurt by the move.
Even accounting for the difficult environment, Goldman's bond-trading results lagged peers. Bank of America Corp's fixed-income trading revenue rose 16 per cent in the fourth quarter to a level 10 per cent higher than Goldman's.