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NEW YORK (Reuters) – Goldman Sachs Group Inc (NYSE:GS) on Friday lowered its previously stated quarterly earnings as the bank set aside more money to pay for its settlement with the Malaysian government over the multi-billion 1MDB scandal.
Goldman Sachs Group Inc lowered its net earnings applicable to common shareholders to $197 million from $2.25 billion, in a filing published on Friday. https://reut.rs/3h0Scd7
The revised earnings reflect a larger-than-previously-announced provision for legal and regulatory costs due to a $3.9-billion settlement the bank reached with the Malaysia government. https://reut.rs/3jzmhCJ
The bank said it set aside $2.96 billion in the second quarter for potential legal and regulatory costs, up from the $945-million Goldman said it set aside on July 15 during its second quarter earnings announcement.
The bank’s stock was down 0.1% in pre-market trading.
On July 24, Goldman agreed to pay the Malaysian government $2.5 billion cash and return at least $1.4 billion in proceeds from assets linked to sovereign wealth fund 1Malaysia Development Bhd (1MDB), in exchange for Malaysia dropping all criminal charges against the bank.
U.S. and Malaysian authorities estimate $4.5 billion was stolen from the fund between 2009 and 2014. Goldman helped the fund raise $6.5 billion in two bond offerings, earning itself $600 million in fees, according to the U.S. Justice Department.
