Jul 19, 2023 - Economy

Goldman earnings hit by real estate markdowns, dealmaking slump

bald man wearing a jacket over a suit and tie with a yellow and white background behind him

David Solomon, CEO of Goldman Sachs. Photo: Stefan Wermuth/Bloomberg via Getty Images

Goldman Sachs' second quarter was a reflection of the many weak spots of the financial services industry, as well as a few of its own making.

  • The company reported a 58% year-over-year decline in earnings this morning attributable to an ongoing deals slump and commercial real estate woes and a write-down in its consumer business.

By the numbers: Investment banking revenue fell 20%.

  • Trading revenue shrank 14%.
  • Real estate investments within its asset management business yielded a $485 million impairment, reflecting properties the bank sold as well as ones that it's marked down but not yet sold.
  • And the company wrote down $504 million of "goodwill" related to its unit that houses GreenSky, a lender it acquired last year that it's trying to offload.

What we're watching: Goldman had been preparing the market for the worst, and executives on today's earnings call sounded a more optimistic tune for the next quarter and beyond.

  • Shares closed up 1% Wednesday.

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