Goldman Sachs Q4 profit misses forecast as Malaysia’s 1MDB scandal drags on

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Goldman Sachs Q4 profit misses forecast as Malaysia’s 1MDB scandal drags on

On Wednesday, the 15th of January 2020, Goldman Sachs Group Inc., the NY-based American multinational investment banking company revealed its quarterly earnings’ report that missed Wall Street estimates by a much-wider margin than initially thought, as the lender’s recent move to set aside a whopping upsum of $1.1 billion in regulatory and legal costs related to Malaysia’s 1MDB scandal had downsized its Q4 earnings’ substantially.

Aside from that, following release of the NY-based lender’s Q4, 2019, quarterly earnings’ report, the Goldman Sachs Group Inc. executives had also pledged to a concrete expense cut to grapple with a palpable profit decline adding an expense target would be set at its investor day later this month.

On top of that, as beforementioned, a lion-share of Goldman Sachs’ losses were stemmed from a much-swelled expense linked to the 1MDB Malaysian corruption scandal, as the lender’s operating expenses surged more than 42 per cent over the fourth quarter of last year.

Meanwhile, according to Goldman Sachs’ Wednesday’s (January 15th) earnings’ report, the NY-based multinational lender’s operating profit dropped 26 per cent to $1.7 billion or $4.69 a share from $6.04 per share at the same time a year earlier, broadly missing an analysts’ estimate of an operating profit of $5.47 per share, IBES data from Refinitiv revealed.

Meanwhile, raising an alarming bell over the US lender’s 2020 profit outlook following three Fed rate-cuts last year, Goldman Sachs’ Chief Financial Officer, Stephen Schorr said in a post-earnings’ call with the reporters on Wednesday (January 15th), “Markets won’t always be this strong and the new builds will take years to achieve scale and materially contribute. ”