Investment banking had its worst opening quarter of the year in a decade as the deals simply vanished, along with the fees that fund year-end bonuses.
Alongside this terrible start to the year, Goldman Sachs (US:GS) had already indicated that it would cut back 2,300 posts, with a further travel expenses cost review to come. The hardest hit, inevitably given the lack of deals, are capital markets desks. But there is also a new phenomenon – Goldman is cutting posts in Asia, in a sign that banks are starting to think about how a world evolving rapidly into power blocs will impact their businesses.
The East Asian slowdown has coincided with a boom in the Middle East, as oil and gas windfall spending in the region looks like it will continue. New forecasts from Goldman Sachs analysts back this change of focus, cutting China's GDP growth expectations for this year from 6 per cent to 5.4 per cent.