Goldman Sachs’ profits fell in the third quarter due to a write-down on its GreenSky fintech business and its real estate investments.
The Wall Street giant on Tuesday reported net income of $2.06 billion, or $5.47 per share, for the three months ended September 30. That was down from $3.07 billion, or $8.25 per share, a year ago.
Goldman’s ill-fated foray into consumer banking proved costly, with losses of $3 billion in three years.
CEO David Solomon has shifted the company’s focus back to its traditional strengths – investment banking and trading, and is pursuing growth in asset management.
The bank took a $506 million impairment charge on GreenSky, on top of the $1.4 billion the company incurred in the second quarter.
GreenSky, which provides home improvement loans to consumers, was sold to a consortium of investment firms led by Sixth Street Partners.
The company was bought last year for $1.7 billion, although it was valued at $2.2 billion in 2021, when the deal was first announced.
Investment properties were another drag on earnings as the bank recorded a $358 million impairment charge. That weighed on the asset management unit’s revenues, which fell 20% to $3.23 billion.
But investment banking offered some hope as fees of $1.55 billion remained largely unchanged from last year as debt underwriting activity resumed and the IPO market rebounded.
“I also expect continued recovery in both capital markets and strategic activities if conditions remain favorable,” CEO Solomon said in a statement.
The US Federal Reserve may raise rates again this year, while several bank executives have said they expect borrowing costs to stay higher for longer.