Wall Street giant Goldman Sachs reports profit slump

The Wall Street Bank said net revenues slumped 40% to $6.3 billion (£4.3bn) in the three months to March 31 2016, down from $10.6bn (£7.3bn) over the same period last year.

Chairman and CEO of Goldman Sachs, Lloyd Blankfein, said the first quarter had presented a “ broad range of challenges” leading to “headwinds across virtually every one of our businesses”.

“Looking ahead, we will continue to focus on delivering superior service to our clients and managing our business efficiently, which remain essential to generating shareholder value over the long term.”

The lender said net revenues in its investment banking division hit $1.46bn (£1 billion) in the first quarter, down 23% over the same period last year and 5% lower than the fourth quarter of 2015.

Meanwhile, net revenues in financial advisory dropped by a fifth to $771m (£535m) in the first quarter compared to the year before, as it felt the impact of a slowdown in the number of mergers and acquisitions.

Revenue from trading bonds, currencies and commodities (FICC) tumbled 47% to $1.6b (£1.1bn) in the first three months of the year compared to last year.

The update comes after rival US bank Morgan Stanley reported on Monday that its Q1 profits had more than halved, down 54% to $1.1bn (£776m), amidst tough trading.

Bank of America, Citigroup, JP Morgan Chase and Wells Fargo also saw their Q1 profits come under pressure last week as they were hit by under performing energy loans linked to the sliding oil price.

Heavy-weight financial stocks have been in the line of fire recently amid investor concern over the gloomy global outlook, falling commodity prices and stubbornly low interest rates in major economies.

Alice Leguay, co-founder of salary benchmarking website Emolument, said US bankers’ bonuses for senior staff have also edged lower, with some banks paying zero bonuses, while others are still offering hefty payouts to staff they want to retain.