Hefty 1MDB fine to hit Goldman Sachs profits

16 Jan 2020 / 07:48 H.

NEW YORK: Goldman Sachs reported a drop in fourth-quarter profits on Wednesday following a mixed performance in its operating businesses as it set aside US$1.1 billion (RM4.48 bilion) in anticipation of settlements in the 1MDB scandal.

Chief Executive David Solomon said the “preponderance” of the US$1.1 billion was related to 1MDB, for which the US bank helped raise US$6.5 billion (RM26.47 billion).

The Justice Department has said more than US$4.5 billion (RM18.33 billion) was stolen from 1MDB by high-level officials at the fund and their associates between 2009 and 2015.

The scandal has dramatically remade politics in Malaysia and led to US indictments of two ex-Goldman bankers, one of whom pleaded guilty.

Settlement talks with US and Malaysian authorities are “progressing and remain active,“ Solomon told analysts on a conference call.

“We are working hard to bring closure to this matter as quickly as possible,“ he added.

“Over the past several years, we have taken the time to be self-critical and reflective to ensure that our culture of integrity, collaboration and escalation only improves from this experience,“ he said. “These efforts will continue.”

The legal charge played a role in Goldman’s 25.8%t drop in fourth-quarter profits to US$1.7 billion (RM6.92 billion), while revenues rose 25.4% to $9.0 billion (RM36.65 billion).

In addition to higher legal costs, Goldman spent more on compensation, benefits and technology. — Reuters

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