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Last Updated: Tuesday, 18 December 2007, 23:06 GMT
Sub-prime sidestep boosts Goldman
File with Goldman Sachs written along spine
Goldman was able to avoid the worst of the sub-prime collapse
Investment bank Goldman Sachs has seen fourth quarter profits rise by 2%, helped by gains in its investment banking and financial advisory arms.

Goldman also bet correctly the value of mortgage bonds would go down, helping it avoid the fallout from the collapse in the US sub-prime mortgage market.

Net profit for the three months to December rose to $3.22bn (1.59bn) from $3.15bn a year before.

Goldman said it was now eyeing growth opportunities in "the global economy".

But Goldman's shares closed down 3.4% at $201.51 on concerns about whether the firm could sustain the same level of profit growth going forward.

'Solid quarter'

The bank's revenues for the quarter rose to $10.74bn from $9.41bn.

"It was a very solid quarter across the board," said David Honold, who invests in financial stocks at Turner Investment Partners.

The sub-prime crisis is leading to a wave of repossessions across the US, which is having a devastating effect on the country's housing market.

The value of sub-prime mortgage-backed bonds has plummeted since the beginning of the year.

Citigroup, UBS, and other big banks have all revealed heavy losses connected to the sub-prime loan markets.

Goldman's results follow those last week of Lehman Brothers Holdings, which reported a 12% fall in earnings, hurt by $3.5bn in writedowns.

VIDEO AND AUDIO NEWS
Analysts explain how Goldman Sachs has bucked downturn



SEE ALSO
Lehman Brothers sees income dip
13 Dec 07 |  Business
Goldman Sachs' bets lift profits
20 Sep 07 |  Business
Goldman leads $3bn fund bail-out
13 Aug 07 |  Business
Lord Browne quits Goldman Sachs
10 May 07 |  Business
Goldman's 8bn Christmas jackpot
13 Dec 06 |  Business
Goldman unveils surge in profits
13 Jun 06 |  Business

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