Goldman Sachs shares jump in early trade on raft of settlements over 1MDB scandal

The headquarters of Goldman Sachs in New York City.
The headquarters of Goldman Sachs in New York City.PHOTO: AFP

SINGAPORE/NEW YORK - Shares in Goldman Sachs rose 1.1 per cent in the first 15 minutes of trade in New York on Friday as analysts said the raft of settlements with regulators and prosecutors in the United States and across the world, including Singapore, was long-anticipated on Wall Street.

The magnitude of the penalties for its role in the 1Malaysia Development Berhad scandal was also in line with expectations, they said.

The bank, in a statement on Thursday, said it would book an additional US$250 million (S$339 million) in the third quarter this year to cover the cost of the penalties beyond previous reserves.

The settlement was "an enormous price", Evercore ISI analyst Glenn Schorr was was quoted as saying by Bloomberg News.

But "it is the price they had to pay to, I would say, have the flexibility to fully run their company and focus on growing and moving the company forward", he said.

The settlements lift a legal cloud that formed during former chief executive officer Lloyd Blankfein's tenure and remained through the handoff to Mr David Solomon two years ago.

"This has been a long process, and we are pleased to be putting these matters behind us. But we are not putting the lessons learnt from this experience behind us," Mr Solomon wrote in a memo to staff on Thursday.

"We have to acknowledge where our firm fell short," he added.