Signs of the strain being felt on Wall Street and in the City of London were seen yesterday when it emerged even the mighty Goldman Sachs is finding life tough – relatively speaking.
The giant investment bank's first-half revenues fell to a level not seen since 2005 as a tricky second quarter of the year took its toll.
In the three months to June, revenues across the bank's global operations were $6.63bn (£4.26bn) while profits hit $962m, less than half the $2.1bn made in the first quarter, a clear indication of the slowdown across financial markets.
Goldman's clients have also been reducing riskier trading activities, leaving the bank searching for fresh sources of revenue, such as looking to target wealthy clients with a new private banking business that it hopes could take deposits and make up to $100bn of loans a year.
Goldman's daily value at risk – a key measure of its risk appetite – fell from $95m in the first-quarter to $92m in the second quarter. That is the lowest since 2006 when the bank began to cut back its market exposure in fear of financial strife ahead.
Revenues from investment banking – typically mergers and takeover advice – were 17 per cent lower than a year ago at $1.2bn.
Goldman is still the biggest player in the field, however – recent deals on which it has worked include the $6.7bn purchase of 45 per cent of Alliance Boots by Walgreens.
Assets under management are up by $12bn to $836bn, but that is $4bn lower than it would have been but for stock-market losses.Reuse content