Goldman Sachs expects a $2.3 billion increase in potential losses from legal disputes

Feb. 24 (Reuters) – Goldman Sachs Group Inc (GS.N) expects to incur $2.3 billion in potential losses from legal action than the reserves it had set aside for such matters last year, a regulatory filing by the investment bank showed on Friday. .

That was in line with what the bank estimated at the end of the third quarter in September, but was higher than the $2 billion loss it expected in 2021.

Goldman has been the target of lawsuits ranging from his role in the Malaysian sovereign wealth fund 1MDB scandal to the collapse of Archegos Capital Management in 2021.

Also expected to head to trial later this year is a long-running anti-sexism lawsuit alleging widespread gender bias in pay and promotions at the Wall Street bank.

Goldman Sachs also said it is cooperating with the Consumer Financial Protection Bureau (CFPB) and other government agencies regarding investigations and inquiries into the bank’s US credit card account management practices.

In a recent regulatory filing, it cited the CFPB investigation, but the latest filing indicates that other government agencies were also seeking inquiries. The company did not identify the other bodies.

Goldman Sachs also approved a $30 billion share buyback program in February a statement in filing.

The disclosure comes ahead of a crucial day for investors, when CEO David Solomon is expected to present plans to hit key financial targets after some missteps that prompted Goldman to moderate the ambitions of its consumer banking unit Marcus.

Investment banks are hoping for a pickup in dealmaking in the second half of 2023 as the Federal Reserve eases its rate-raising cycle, after a tough year when financing dried up and companies postponed plans for mergers and acquisitions.

Last month, Goldman said it would cut about 3,200 jobs, which make up 6% of its workforce, in an effort to cut costs.

Goldman shares were down about 0.5% in pre-market trading Friday, in line with other major US banks. They’ve gained nearly 11% in the past year.

(Reporting by Nikit Nishant in Bengaluru and Saeed Azhar in New York; Editing by Arun Koyoor and Shonak Dasgupta

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