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Sub-prime sidestep boosts Goldman | Sub-prime sidestep boosts Goldman |
(about 9 hours later) | |
Investment bank Goldman Sachs has seen fourth quarter profits rise by 2%, helped by gains in its investment banking and financial advisory arms. | Investment bank Goldman Sachs has seen fourth quarter profits rise by 2%, helped by gains in its investment banking and financial advisory arms. |
Goldman also bet correctly the value of mortgage bonds would go down, helping it avoid the fallout from the collapse in the US sub-prime mortgage market. | Goldman also bet correctly the value of mortgage bonds would go down, helping it avoid the fallout from the collapse in the US sub-prime mortgage market. |
Net profit for the three months to December rose to $3.22bn (£1.59bn) from $3.15bn a year before. | Net profit for the three months to December rose to $3.22bn (£1.59bn) from $3.15bn a year before. |
Goldman said it was now eyeing growth opportunities in "the global economy". | Goldman said it was now eyeing growth opportunities in "the global economy". |
But Goldman's shares closed down 3.4% at $201.51 on concerns about whether the firm could sustain the same level of profit growth going forward. | |
'Solid quarter' | 'Solid quarter' |
The bank's revenues for the quarter rose to $10.74bn from $9.41bn. | The bank's revenues for the quarter rose to $10.74bn from $9.41bn. |
"It was a very solid quarter across the board," said David Honold, who invests in financial stocks at Turner Investment Partners. | "It was a very solid quarter across the board," said David Honold, who invests in financial stocks at Turner Investment Partners. |
The sub-prime crisis is leading to a wave of repossessions across the US, which is having a devastating effect on the country's housing market. | The sub-prime crisis is leading to a wave of repossessions across the US, which is having a devastating effect on the country's housing market. |
The value of sub-prime mortgage-backed bonds has plummeted since the beginning of the year. | The value of sub-prime mortgage-backed bonds has plummeted since the beginning of the year. |
Citigroup, UBS, and other big banks have all revealed heavy losses connected to the sub-prime loan markets. | Citigroup, UBS, and other big banks have all revealed heavy losses connected to the sub-prime loan markets. |
Goldman's results follow those last week of Lehman Brothers Holdings, which reported a 12% fall in earnings, hurt by $3.5bn in writedowns. | Goldman's results follow those last week of Lehman Brothers Holdings, which reported a 12% fall in earnings, hurt by $3.5bn in writedowns. |
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