Goldman Sachs faced a notable decline in its net profit for the third quarter of 2023, falling to $2.06 billion compared to the previous figure of $3.07 billion. This drop can be primarily attributed to substantial write-downs on investments in its fintech venture, GreenSky, and real estate holdings. As a consequence, the bank’s premarket trading share experienced a slight decline.
Goldman Sachs had ventured into consumer banking, which ultimately incurred a cumulative loss of $3 billion over a span of three years. In response, CEO David Solomon decided to refocus the bank on its traditional strengths, such as investment banking and trading, while also pursuing growth in asset and wealth management.
The bank absorbed a write-down of $506 million related to GreenSky, exacerbating the hit it had taken in the second quarter, amounting to $1.4 billion. Subsequently, Goldman Sachs sold GreenSky to a consortium led by Sixth Street Partners for $1.7 billion.
Real estate investments also presented challenges for the bank, as an impairment charge of $358 million had a negative impact on revenue from the asset and wealth management unit.
Despite these setbacks, Goldman Sachs’ investment banking segment remained resilient, generating fees of $1.55 billion. This was largely driven by the resurgence of debt underwriting activity and a robust initial public offering (IPO) market.
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