US banks profit boost
US giants Goldman Sachs and Citigroup doled out a tale of two banks yesterday with the first reporting forecast-breaking profits while the second struggled into the black.
Goldman profits almost quadrupled to $3.19billion (£2billion) for the third quarter to September, buoyed by strong trading in bonds, equities, commodities and foreign exchange. Profits were also boosted by the bank cutting the proportion of income it paid out in bonuses.
Citi made a more modest profit of $101million, following an $8billion hit from bad debts as US consumers failed to pay back their credit cards and mortgages. It made a loss of $2.8billion during the same period last year.
Goldman chief executive Lloyd Blankfein said the world continued to face “serious economic challenges”. But he added: “We are seeing improving conditions and evidence of stabilisation, even growth, across a number of sectors.”
Investment banking revenues from advising on deals were down on a year ago at $899million but the bank said there were signs of new life in the mergers and acquisitions market.