The investment bank Goldman Sachs, the firm that has looked the best throughout the credit crisis, reported a profit Tuesday of $845million or $1.81 a share in the third quarter, down 70 percent from a year ago.
Profit in the quarter a year ago was $2.81 billion, or $6.13 a share.
The results, while in the black, showed that even the strongest on Wall Street are having a tough time making money.
Overall, revenue fell 51 percent, to $6.04 billion, from $12.3billion in the quarter a year ago. Analysts projected a profit of $1.71 a share on revenue of $6.23 billion, according to Thomson Reuters.
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Goldman executives tried to refute notions that their firm's business model might be broken.
Just a day after Merrill Lynch announced that it would be sold to Bank of America, there were doubts in the market about whether Goldman and Morgan Stanley can survive as independent investment banks.
Bear Stearns and Lehman Brothers collapsed because of excessive risk and because they lacked secure funding models.
Merrill Lynch is expected to gain some stability by becoming a part of Bank of America, the nation's largest bank by assets, which has a large deposit base.
“We believe this is not about the model, this is about performance,” said David Viniar, Goldman's chief financial officer, in an interview. “There have been a lot of firms that have suffered. They have not all been investment banks. They have been across the financial industry, whether they be commercial banks, regional banks, insurers.”
Viniar said Goldman would not benefit much from a merger with a commercial bank.
Still, he acknowledged that such a merger provides stability in the minds of investors.
“They make people feel better,” he said. “But we think our business model works pretty well.”