Goldman Sachs profits rise

Goldman Sachs, the US investment bank has reported a 2% rise in fourth quarter profits helped by gains in its investment banking and financial advisory divisions.

Net profit for the quarter to December increased to $3.22 billion (£1.59 billion) compared with $3.15 billion 12 months earlier. The bank’s revenues for the quarter increased to $10.74 billion from $9.41 billion.

The company also forecasted that the value of mortgage bonds would decrease and subsequently has avoided the fallout from the collapse in the US sub-prime mortgage market. The company is now seeking growth opportunities in ‘the global economy’.

David Honold, who invests in financial stocks at Turner Investment Partners, said it was a very solid quarter across the board. The sub-prime crisis is leading to a wave of repossessions across the US, which is having a devastating effect on the country’s property market said Mr Honold.

Other major investment banks such as UBS and Citigroup have all reported heavy losses in relation to their exposure to the sub-prime mortgage markets.

It was recently announced that Goldman Sachs has been hired to use its global reach to help put in place a financing package to rescue crisis-torn Northern Rock.

Story link: Goldman Sachs profits rise