Tuesday’s announcement by the investment banking powerhouse stated that it earned $3.9Billion in fourth quarter earnings, or $10.81 per share. Analysts had forecast a profit of $4.1billion, or $11.70 per share. Goldman Sachs shares fell nearly 8% upon the news.
Goldman Sachs reported that fourth quarter revenue was $12.6 billion. This is higher than forecasts and a rise of 8% over a year ago.
The company has increased its efforts to cater for consumers and not just business. Goldman Sachs’ consumer wealth management business, which also includes Marcus online banking, saw record revenues last year.
Goldman Sachs had a total revenue of over $59 billion for the year and a net income of $21.6 million.
“2021 was an exceptional year for Goldman Sachs. David Solomon, Goldman Sachs CEO, said that the extraordinary performance of the firm is testament to the strength and character of our client base. “Our leadership team is committed to expanding Goldman Sachs, diversifying the businesses, and delivering strong returns to shareholders. We are moving forward.”
Solomon warned investors during the conference call with analysts about the possibility of inflation due to rising wages and disruptions in supply chains resulting from the Omicron strain of Covid-19.
“It’s not surprising that the recent spike in cases is putting more pressure on supply chain. Solomon stated that inflation is still a problem in many countries and that major central banks are starting to raise rates.
He stated, “Inflation may remain above trend for some period. Inflationary pressures could increase before they decrease in the short term. As these easing policies remain unwound, I believe we may see more volatility.
“My view is Covid-19 will become endemic. As a society, it will be an endemic disease and we will find a way for us to live with it,” he stated. He also said that Goldman Sachs must be flexible and dynamic in its protocols to adapt to the new world, while still allowing the majority of our employees to return to work safely.
The solid results for 2021 were a boon to employees at Goldman Sachs. Tuesday’s statement by Goldman Sachs revealed that it had set aside $17.7billion in compensation and benefits for its employees last year. This represents a 33% increase over 2020. For the 43,900 employees of the firm, that’s an average of almost $404,000.