Economy

Goldman Sachs Profits, Revenue Down Dramatically, Investment Bank Reports

SEC Announces Civil Fraud Charges Against Goldman Sachs

The new headquarters of Goldman Sachs, in Lower Manhattan. Mario Tama/Getty Images North America hide caption

toggle caption Mario Tama/Getty Images North America

In one of the worst quarters since the beginning of the financial crisis, Goldman Sachs profits fell 82 percent. The powerful investment banking firm says its revenue is also down.

In part, its profits declined because of a huge settlement it paid to the Securities and Exchange Commission, NPR's Yuki Noguchi explains.

On top of that, it also paid $600 million in British taxes on executive bonuses.

"Despite those big-ticket expenses, Goldman Sachs profits topped analysts' estimates," Noguchi said, adding that "the larger ongoing problem for the bank is that revenue is down more than expected, because of a decline in activity across all of its businesses."

That is adding to some concern that the economy is slowing down once again.

According to Bloomberg's Christine Harper,"Goldman Sachs, which posted the highest equities trading revenue on Wall Street last year, said the division's revenue slumped 62 percent in the second quarter from a year earlier to $1.21 billion."

Still, the unit's revenue beat equities divisions at JPMorgan Chase & Co., Citigroup Inc. and Bank of America Corp. in the quarter.

Last week, Goldman Sachs paid a record $550 million fine to settle a charge it had misled investors about a risky mortgage-related security. The company settled that fraud complaint without admitting or denying the claims.

(You can read the company's second quarter 2010 results here.)

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