A sharp drop in bond trading revenue slammed earnings at the investment bank. Citi's profit soared as the bank shrank its legal costs. Fred Katayama reports.
Weak bond trading slammed earnings at Goldman Sachs. Quarterly profit at the investment bank plummeted by more than a third due to a rough quarter for its fixed income business. That was much steeper than the declines seen at JPMorgan Chase and Bank of America. CEO Lloyd Blankfein said, "We experienced lower levels of activity and declining asset prices during the quarter, reflecting renewed concerns about global economic growth." Revenue fell across its businesses except for investment banking. The huge rise in mergers and acquisitions offset the decline in equity underwriting. Goldman's shares fell in early trading, adding to their 7 percent loss this year. A different scene at Citi. Lower legal costs helped drive Citigroup's profit up more than 50 percent. And the unit that holds the bad assets that Citi wants to sell produced a profit. The bank has been streamlining itself and cutting costs since the financial crisis to boost profitability. Citi's shares, which are down 6 percent this year, rose at the start of trading.