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Goldman Sachs: Bad Quarter But No Changes In Sight

Summary

Goldman Sachs reported that net income fell by 60 percent.

This performance has caused analysts to question why Goldman has not changed its business model as have several of the other big banks.

Goldman's CFO responded, that "analysts should note focus too much on one quarter...".

During the current economic recovery, Goldman Sachs Group, Inc. (NYSE: GS) kept its basic business model, more so that the other big US banks.

During the early years of the recovery, Goldman did pretty well, outperforming most of its big rivals, with the exception of Wells Fargo.

It's return on shareholder's equity fell to 6.4 percent in 2011, but has been around 10.0 percent ever since.

In the first quarter of 2016, Goldman really got "thumped" with net income falling by 60 percent and its annualized return on equity dropping to 6.4 percent.

A major question that came up in Tuesday's conference call was about whether or not Goldman Sachs needed to change its business model.

Nathaniel Popper of the New York Times begins his article on Goldman's results with this issue: "Goldman Sachs has been betting that it will again see around the next corner better than its competitors. As other large banks have been cutting back the trading and investing businesses that have long defined Wall Street, Goldman has fearlessly stuck to its guns."

Dakin Campbell and Jennifer Surane, in Bloomberg, bring up the same subject: "The results on Tuesday stem from sweeping structural...


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