Goldman suffers tough first quarter as FICC revenue dives

Goldman's annual results revel a fall in FICC, but an increase in equities in 2015.

Goldman Sachs net revenue for fixed income, currency and commodities (FICC) fell last year as a result of difficult market conditions for some products.

The bank’s full-year earnings report, published today, stated FICC revenue reached $7.32 billion in 2015, a 13% decrease compared to 2014, “reflecting significantly lower net revenues in mortgages, credit products and commodities.”

“These decreases were partially offset by significantly higher net revenues in interest rate products and currencies,” a statement said.

In the report, Goldman Sachs explained: “During 2015, Fixed Income, Currency and Commodities Client Execution operated in a challenging environment generally characterised by difficult market-making conditions, as well as low levels of client activity in mortgages and credit.”

By contrast, Goldman’s equities figures for the year were healthy, with a 16% increase in revenue to $7.38 billion compared to 2014.

This increase is, “due to significantly higher net revenues in equities client execution across the major regions, reflecting significantly higher results in both derivatives and cash products.”

Fourth quarter figures reveal FICC revenue was down 8% to $1.12 billion compared to the final quarter of 2014. Goldman Sachs said this was due to lower net revenues in commodities, partially offset by significantly higher net revenues in interest rate products.

Equities in the fourth quarter were also down by 9% to $1.76 billion due to, “lower net revenues in cash products and derivatives.” Commissions and fees were also lower, reflecting lower volumes.

Lloyd C. Blankfein, chairman and chief executive officer, had a positive outlook and said in the report:. “Looking ahead, we believe our strong global client franchise leaves us well positioned to generate superior returns over the long term.”