Falling markets hit the revenues of the US firm in 2022.
Goldman Sachs announced yesterday that net revenues in its wealth and asset management business slumped by 39 per cent in 2022 from a year before, mainly hit by significantly weaker equity and debt investment revenues.
The US firm said “broad macroeconomic and geopolitical concerns” – a reference to fears of recession, a rising rate environment and the war in Ukraine – hit markets, and the business of firms such as Goldman Sachs.
Incentive fees were significantly lower, primarily driven by harvesting in the prior year. Management and other fees were higher, reflecting the inclusion of NN Investment Partners and a reduction in fee waivers on money market funds.
Private banking and lending net revenues were significantly higher, primarily reflecting higher deposit spreads, as well as higher loan and deposit balances, the firm said in a statement.
In the fourth quarter, asset and wealth management net revenues fell 27 per cent year-on-year, standing at $3.56 billion.
At the overall group level, Goldman Sachs logged net revenues of $47.4 billion, down 20 per cent on a year earlier. Net earnings slumped by 49 per cent to $11.3 billion in 2022. A big factor was a 48 per cent crash in investment banking revenues.
The group’s Common Equity Tier 1 ratio – a common measure of a bank’s capital buffer – was 15.1 per cent at the end of December last year, up from 14.2 per cent a year earlier.