Goldman Sachs swung into the red in Asia for the first time since 2008 following declines in the Chinese stock market.
The mighty investment bank’s Asian division has just posted a loss of $103 million (£65 million) for 2011, compared with a profit that topped $2 billion in 2010.
The firm was hit by a dip in the value of its holdings in Industrial & Commercial Bank of China, which generated a loss of $517 million.
Chinese banks stocks were hurt last year amid fears over bad loans.
“Last year was the perfect storm for Goldman in Asia as it was a brutal year for equities in the region,” Sandy Mehta of Value Investment Principals told Bloomberg. He added that he expects a rebound this year: “The markets have gone up, so their equity positions would have rebounded strongly.”
Goldman said in its filing: “The decline in net revenues in Asia compared with 2010 primarily reflects lower results in investing and lending, principally due to losses from public equities, reflecting a significant decline in equity markets in Asia during 2011.”
Investment banks had a poor final quarter last year. Clients mostly opted not to trade or do big deals, hurting revenues across the sector. There have been signs of a pick-up this year.
