Axa cuts stake in Goldman Sachs

French insurer Axa has cut its holdings in US investment bank Goldman Sachs, which last month announced an 82 per cent profit slide, by roughly one half, according to documents filed with the US Securities and Exchange Commission.

Axa, which had been Goldman’s largest shareholder, sold more than 14 million shares between January and June, reducing its stake to 2.8 per cent from 4.8 per cent, the documents showed.

Axa said the sale was part of its plan to re-orient its financial assets in the United States. Axa has lowered its stake in the US bank US Bancorp while boosting its participation in Wells Fargo and Bank of America.

US investment funds BlackRock and T Rowe Price have also cut their holdings in Goldman Sachs. Goldman Sachs last month disclosed that its profits had slumped 82 per cent in the second quarter when the company was hit by a massive US fraud settlement and a new British tax on bonuses.

Reporting its worst quarter since the height of the economic crisis nearly two years ago, the storied Wall Street firm said earnings were slashed on account of exceptional government payouts worth $1.15 billion.

The New York-based firm set aside $600 million to pay for a new British tax on executive compensation and $550 million to settle US government fraud charges.

The earnings announcement came just days after the firm agreed to pay the US Securities and Exchange Commission the record settlement for mistakenly giving “incomplete” information to clients.

The SEC accused Goldman of allowing a prominent hedge fund to design a complex financial product for clients that was designed to fail and which the hedge fund was betting against.

But Goldman’s woes were not limited to strained relations with government.

Reporting net earnings of $613 million, chief executive officer Lloyd Blankfein said the business environment had become tougher for the embattled firm.

“The market environment became more difficult during the second quarter, and as a result, client activity across our business declined,” he said in a statement.