Goldman Sachs Group Inc Reported Its Smallest Quarterly Profit in Four Years

Goldman Sachs Group Inc on Thursday posted lowest profit in four years. The multinational investment firm set aside more than $1 billion to cover potential mortgage settlements which could be the reason for smaller profit, due to which its nervous investors pulled back from bond trading.

It has been found that the bank set aside $1.45 billion for mortgage-related legal costs and regulatory matters, which is said to be five times as much as in the second quarter last year.

It is known that the American multinational investment banking firm is among other banks that have been targeted by a federal-state working group to go after misconduct in the pooling and sale of mortgage securities during the financial crisis.

JPMorgan Chase & Co, Bank of America Corp and Citigroup Inc has already agreed to settle for $13 billion, $16.65 billion and $7 billion, respectively.

Goldman’s rival Morgan Stanley, which is to report its profit on Monday, is the next in line to make the potential settlements, a person familiar with the matter told.

Goldman's chief financial officer, Harvey Schwartz, on a conference call Thursday, said, “That's one significant ... legacy item that we look forward to getting behind us”.

Bank’s share was down 1.3% at $210.16 in afternoon trading, even though the earnings exceeded the average analyst estimate.

Net revenue of the bank from trading fixed-income securities, currencies and commodities (FICC) fell 28 % to $1.60 billion. In comparison, JPMorgan's FICC revenue fell 10 % during the period on an adjusted basis, while Bank of America's fell 9.3 %.