Goldman expects $2.3 billion more in potential litigation losses

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

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

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

A long-running gender bias lawsuit alleging widespread bias against women in pay and promotions at the Wall Street bank is also expected to go to trial later this year.

Goldman Sachs also said it is cooperating with the Consumer Financial Protection Bureau (CFPB) and other government agencies regarding investigations and investigations related to the bank’s management of credit card accounts in the US.

The last regulatory filing had mentioned the CFPB probe, but the latest filing suggested that other government agencies were also looking to investigate. The company has not identified the other bodies.

Goldman also approved a $30 billion share buyback program in February, it revealed in the filing.

The revelation comes ahead of a pivotal investor day when Chief Executive David Solomon is expected to present plans to achieve key financial goals following some missteps that led Goldman to dampen ambitions for its consumer banking arm, Marcus.

Investment banks are hoping for an uptick in dealmaking in the second half of 2023 as the Federal Reserve eases its cycle of rate hikes after a rough year in which funding dried up and companies delayed M&A plans.

Last month, Goldman said it was cutting about 3,200 jobs, 6% of its workforce, in a bid to cut costs.

Shares of Goldman fell nearly 0.5% in premarket trading Friday, in line with other major US banks. They were up nearly 11% over the past year.

Reporting by Niket Nishant in Bengaluru and Saeed Azhar in New York; Edited by Arun Koyyur and Shounak Dasgupta

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