Investment banking revenues in the quarter rose 6% year over year and dropped 23% sequentially to $1.56 billion. Institutional client services revenues fell 15% year over year to $3.21 billion, and were 11% lower sequentially. The big hit came in fixed income currency, and commodities, down 33% year over year and 9% sequentially.
The bank attributed the drop in institutional client services to “significantly lower net revenues in mortgages and, to a lesser extent, currencies and interest rate products. In addition, net revenues in commodities were lower. These decreases were partially offset by higher net revenues in credit products.”
In the bank’s investing and lending business, revenues dropped 60% year over year and 63% sequentially. Goldman attributed the decline to “a significant decrease in net revenues from investments in equities, as net revenues in public equities were negatively impacted by a significant decrease in global equity prices during the third quarter of 2015.”
ALSO READ: 5 Dividend-Paying Blue Chip Stocks Trading Under 15 Times Forward Earnings
Operating expenses fell 5% year over-year and 34% sequentially to $4.82 billion. Compensation and benefits expenses fell 16% year over year, and non-compensation expenses rose 8% to $2.46 billion. Provisions for litigation and regulatory proceeds totaled $416 million up from $194 million in the year-ago quarter.
Net earnings for the quarter fell 38% year over year but rose 45% sequentially.
Bank CEO Lloyd Blankfein said:
We experienced lower levels of activity and declining asset prices during the quarter, reflecting renewed concerns about global economic growth. We continue to see strong levels of activity in Investment Banking and growth in Investment Management, and looking ahead, are encouraged by the competitive positioning of our global client franchise. Our focus on serving our clients and improving operating leverage puts us in a strong position to generate superior returns for our shareholders.
Goldman increased its Basel III common equity Tier 1 ratio to 12.4% on the standardized approach and 12.7% on the advanced approach.
The bank did not offer guidance in its press release, but the consensus estimates call for fourth-quarter EPS of $5.01 on revenues of $7.99 billion. The EPS estimate for the 2015 fiscal year is now $16.17 on revenues of $34.94 billion.
Shares traded lower by about 1.4% in the premarket Thursday, at $177.00. The current 52-week range is $167.49 to $218.77. Thomson Reuters had a consensus analyst price target of $210.83 before the results were announced.
ALSO READ: Jefferies Franchise Pick Stocks to Buy That Also Pay Big Dividends
Top Gaining Stocks
Top Losing Stocks