Page last updated at 13:42 GMT, Tuesday, 17 June 2008 14:42 UK

Slowdown knocks Goldman profits

Goldman CEO Lloyd Blankfein
Mr Blankfein is pleased with Goldman's performance

Investment bank Goldman Sachs has reported an 11% fall in quarterly profit as banking activity slowed amid the global credit crunch.

It reported net income of $2.09bn (1.1bn) in the three months to 30 May, down from $2.33bn a year ago.

While its business has slowed, Goldman has avoided the massive losses the credit crisis has inflicted on rivals such as Lehman Brothers.

The results beat analysts' expectations and boosted the company's share price.

"Given the difficult market conditions, we are particularly pleased to report strong results for the second quarter," said Goldman's chairman and chief executive Lloyd C. Blankfein.

'Uncanny ability'

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

However, the credit crunch triggered by the sub-prime meltdown has resulted in fewer buyouts and share flotations that are the mainstay of investment banking.

"They [Goldman Sachs] have an uncanny ability to stay out of trouble," said Thomas Russo, partner and portfolio manager at Gardner, Russo & Gardner.

"One defence against trouble is corporate culture, and Goldman has shown they have retained a highly unusual degree of discipline in their culture," he added.

On Monday, Lehman Brothers reported a quarterly loss of $2.8bn - the first the bank had reported since it went public in 1994

.


SEE ALSO
Lehman Brothers posts $2.8bn loss
16 Jun 08 |  Business
US bank profits more than halved
18 Mar 08 |  Business
Sub-prime sidestep boosts Goldman
18 Dec 07 |  Business
Goldman Sachs' bets lift profits
20 Sep 07 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific