Wall Street profits sunk in first quarter of 2022 as last year’s deal-making boom ran out of steam
Profits on Wall Street sank in the first quarter of 2022 as last year’s deal-making and money-raising boom ran out of steam.
Goldman Sachs’s profits slid 42 per cent to £3billion. The banking giant was boosted by its trading division, which seemed to navigate the volatility in markets caused by the war in Ukraine better than some of its peers.
But this was countered by performance in the investment banking arm, which advises on takeovers and helps to raise money for companies, as revenue slumped by 36 per cent.
Slump: Goldman Sachs’ profits slid 42%, but the banking giant was boosted by its trading division, which seemed to navigate the volatility in markets better than some of its peers
Chief executive David Solomon said: ‘It was a turbulent quarter dominated by the devastating invasion of Ukraine.’
Citigroup’s profits nearly halved, falling 46 per cent to £3.3billion. Chief financial officer Mark Mason said the Russia-Ukraine war ‘drove significant volatility’ in currency markets.
The bank also revealed it had set aside £1.5billion to cover loan losses, including £766million relating to its Russia exposure.
At Morgan Stanley, profits slid 11 per cent to £2.7billion.
And while its investment bank suffered, the part which works on mergers and acquisitions saw revenue almost double.
Instead, it was the division which works on company floats which pulled the performance down, as the market dried up amid Russia and inflation worries.
The Wall Street results followed the trend set by JP Morgan, which reported its first-quarter numbers earlier this week.
In a sign of how nervous banking bosses are becoming about the rising cost of living and the war in Ukraine, JP Morgan’s boss Jamie Dimon said there was ‘absolutely’ a possibility that the US might slide into a recession.