Goldman Sachs and Morgan Stanley profits hit four-year low
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The news: Goldman Sachs and Morgan Stanley reported their lowest annual profits in four years, with both banks hit by drop-offs in their investment banking and bond trading businesses.
The numbers: Goldman's net income fell 24% in 2023 to USD8.5 billion ($12.9 billion), while Morgan Stanley reported an 18% drop in full-year net income to USD9.1 billion. While Goldman’s quarterly net income rose 51% to $2 billion compared to the previous year, its investment bank revenues were down 12% compared to last year's quarter.
Morgan Stanley, reporting its final results under CEO James Gorman following the arrival of successor Ted Pick this month, saw investment banking and trading profits fall by around a third. Shares in Goldman Sachs were up about 0.7% at market close on Tuesday, with Morgan Stanley down more than 4%.
The context: The results reflected a difficult year for both banks, with Goldman also feeling losses from its retreat from retail banking, including the sale of its online lending business GreenSky in October.
What they said: Goldman CEO David Solomon described the operating conditions in 2023 as “not a B+ or an A environment”. He told analysts: “As we enter 2024, the potential for rate cuts in the first half of this year has renewed optimism for a soft landing.”
The sources: Morgan Stanley , Goldman Sachs, Financial Times
