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Two US banks outperform

Two US banks outperform

(19 March 2008 – USA) Two US banks that have faired relatively well in the sub-prime mortgage crisis have outperformed expectations but have still shown a fall from grace. Goldman Sachs analyst William Tanona said that the quarter was better than investors' worst case fears, indicating that expectations have been set low.

The first quarter results of investment banks Goldman Sachs and Lehman Brothers were above Wall Street expectations, but recorded earnings more than 50 percent lower than last year.

Each bank also wrote-down around $US2 billion (A$2.16 billion) in credit-related losses, which is a relatively small loss compared with the likes of Citigroup.

Goldman’s income fell 53 per cent to $US1.51 billion, compared with last years net income of $US3.2 billion. Revenue for Goldman Sachs was $US8.34 billion.

The investment bank exceeded market expectations, which were set at approximately $US1.21 billion for income and $US7.47 billion for revenue.

Mr Tanona also said that for Goldman Sachs, revenue from all business lines exceeded expectations, with the exception of financial advisory.

For Lehman Brothers, net income fell 57 percent to $US489 million, from $US1.15 billion a year earlier. Revenue fell relatively less, by 31 percent to $US3.51 billion.

Expected results from analysts were again exceeded, with income expected to be approximately $US435 million and $US3.35 billion for revenue.
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