Goldman’s profits tumbled 66% to $1.33 billion in the fourth quarter, it said Tuesday, well below what Wall Street had expected. Profits at Morgan Stanley slumped 40% to $2.2 billion, barely beating analyst projections.
Goldman on Tuesday disclosed to investors that its consumer banking division was struggling far more than what was previously known publicly. The bank set aside $972 million to cover potential credit losses in the quarter, which the bank said came from higher charge offs in its rather new credit card business.
“Widely expected to be awful, Goldman Sachs’ Q4 results were even more miserable than anticipated,” said Octavio Marenzi, CEO of consulting company Opimas LLC, in an email.
It appears Goldman is also scaling back its push to establish a consumer banking business that is part of a company-wide reorganization. The bank disclosed that its consumer banking division had lost $3 billion since 2020 in its consumer lending business.