Goldman Sachs profits plunge 58% in second quarter

Goldman Sachs on Wednesday said earnings fell by a whopping 58% in the second quarter as the Wall Street giant blamed a retreat from consumer businesses and declining investment values for its worst results in three years.

The dreadful performance fell short of Wall Street estimates even after Goldman boss David Solomon had warned analysts in the run-up to the earnings release that they should lower their expectations.

Goldman reported that it earned $3.08 a share — lower than the $3.18 analysts had predicted.

The bank’s revenue dipped 8% to $10.9 billion, according to the report.

“This quarter reflects continued strategic execution of our goals,” Solomon said in a statement.

“Global banking and markets delivered solid returns in an environment with cyclically low activity,” he added, citing the bank’s top ranking in M&A league tables for completed deals.

The results were the bank’s worst since the second quarter of 2020, when it took writedowns over a corruption scandal linked to Malaysian state fund 1MDB.

Shares dipped 0.7% in early trading.

Goldman took a writedown of $504 million tied to its GreenSky business, which facilitates home improvement loans to consumers, and $485 million related to its real estate investments.

The bank also took $615 million in credit losses including writedowns related to its consumer loans and business.

Goldman agreed to acquire GreenSky for $2.2 billion in 2021 and later closed the deal at $1.7 billion.

Goldman’s Marcus unit was also folded into its merged asset and wealth management arm last year, as the investment bank began pulling back from retail banking.

Goldman’s terrible quarter looked even worse compared to rivals JPMorgan Chase, Bank of America and Morgan Stanley, which all reported strong earnings in the past week.

JPMorgan announced it raked in $14 billion in profit in the second quarter — despite CEO Jamie Dimon’s dire predictions for the economy, which has been saddled with sky-high levels of inflation in recent years.

The poor earnings results are likely to ratchet up pressure on Solomon, whose leadership and management style have been called into question by partners and rank-and-file employees.

Last month, The Post was the first to report that Goldman’s board was beginning to re-evaluate Solomon in the wake of an exodus of top talent from the Wall Street firm.

Since Solomon took the helm in 2018, Goldman partners have complained over their skimpy bonuses, his costly venture into consumer banking, and his side hustle as a DJ.

With Post wires