Goldman Sachs reported a steep drop in first-quarter profits as it set aside funds for bad loans due to coronavirus shutdowns, even as upheaval in markets boosted its trading business (SPENCER PLATT)

New York (AFP) – Goldman Sachs reported a steep drop in first-quarter profits Wednesday as it set aside funds for bad loans due to coronavirus shutdowns, even as upheaval in markets boosted its trading business.

The investment banking giant reported profits of $1.1 billion, down 49 percent from the year-ago period. Revenues dipped one percent to $8.7 billion.

Goldman set aside $937 million during the quarter to deal with potential defaults, citing “continued pressure in the energy sector and the impact of the Covid-19 on the broader economic environment.”

The move follows similar announcements from JPMorgan Chase and other large banks, which are girding for a US recession that some fear could be deep and prolonged.

The shock from the coronavirus crisis had a feast-or-famine impact of many of Goldman’s divisions.

On the positive side, the firm enjoyed double-digit revenue boosts to fixed income and equity trading, and won the bank “significantly higher” revenue in corporate lending and underwriting.

But Goldman suffered an operating loss in its asset management business due to losses in equity and debt investments. The firm also saw a big drop in revenues tied to financial advising for corporate mergers.

Shares fell 1.99 percent to $174.80 in pre-market trading.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.