Goldman Sachs reports first quarterly loss since 1999
17 Dec 2008
The US banking giant Goldman Sachs has reported its first quarterly loss of $2.12 billion, its first ever loss since going public in 1999.
It eported a $2.12 billion quarterly loss, down from a net income of $3.22 billion during the same period in 2007.
Goldman Sachs in September changed it status to become a bank holding company allowing it to take deposits from investors (See: Goldman Sachs, Morgan Stanley surrender investment bank status)
The Wall Street Journal reported in the first week of December that the New York-based Goldman Sachs was considering launching an online bank, a key to its being able to raise government funds.
Goldman Sachs already has about $20 billion in deposits - in September it sold double the amount of stock it had earlier planned to sell in a public offering, raising $5 billion after having recieved a $5 billion a cash injection from Warren Buffett the previous day.
Warren Buffett's Berkshire Hathaway bought $5 billion in preferred stock and received warrants to purchase an additional $5 billion worth of common shares over five years (See: Warren Buffett invests $5 billion in Goldman Sachs).
Goldman Sachs and rival Morgan Stanley are the only two of Wall Street's original five investment banks still in independent existence while Lehman Brothers went bankrupt in September.
US financial institutions have had the worst period this year and suffered billion-dollar losses which resulted in jobs cuts, while some of them were taken over by the government or rivals.
The US government has bailed out Citigroup, Bear Stearns, Fannie Mae, Freddie Mac and American International Group in an effort to stabilise the financial system and injected hundreds of billions of dollars into the financial system.
The stock rose 4 per cent in New York as Goldman Sachs's loss for the three months to the end of November was still smaller than the huge loss estimated by market analyst.
Warren Buffett's Berkshire Hathaway had invested $5 billion in Goldman Sachs in September, which may have helped the company to sustain its image when the country was rocked by its worst financial crises as well as to shore up its balance sheet.