A report before the Federal Reserve is investigating the consumer business of the investment bank Goldman Sachs
GOLDMAN SACHS
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Brings the decline share down by about 3% as of this writing.
The regulator is looking into whether Goldman Sachs had the right safeguards in place to protect consumers when it increased lending at the division, also known as Marcus, according to a Wall Street Journal report. It was reported in Bloomberg that the Fed previously surveyed Marcus in September.
“As we told the Wall Street Journal, the Federal Reserve is the primary regulator of our federal banks and we do not comment on the accuracy or inaccuracy of matters related to discussions with them,” a Goldman Sachs spokesman said.
Just a few days ago, Goldman CEO David Solomon admitted that the bank suffered a disappointing quarter in part because it took on too much in the consumer banking business. Last week, the New York investment bank released its quarterly report with its biggest loss in more than a decade, showing Decrease in income and increase in expenses.
The bank earned $3.32 per share, down 69% from $10.81 in the same period last year and well below the consensus of $5.56 per share. Investors also did not find hope in the conference call – Solomon hinted that this year’s goals will be challenging. Goldman achieved a 10.2% return on equity for 2022, compared to 23% in 2021 and 4.4% in the fourth quarter. The bank will have to earn about $40 per share in 2023 to reach a 13% return on capital, the earnings rate is $14 per share. The analyst consensus is for a profit of $36 per share, but it is likely that the forecasts will be lowered in the coming days following recommendation updates.
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