Crisis? What crisis? Bonuses soar at Goldman as profits leap
Nikhil Kumar is The Independent's New York correspondent. He was formerly assistant editor on the foreign desk and has also done a variety of jobs on the city desk, where he wrote about markets, commodities and other business and economics topics.
Tuesday 16 July 2013
Bankers’ pay at Goldman Sachs jumped more than 25 per cent for the last three months, meaning the average employee earned £77,200 in the quarter.
Pay rose after a doubling in the bank’s profits against the same period a year earlier. Revenues from trading and investment banking helped the Wall Street giant, which employs thousands of the best-paid bankers in London, to post net income of $1.93bn (£1.28bn) for the three months to June against $962m a year earlier. That was well above analysts’ forecasts. The bank, whose shares are up nearly 30 per cent since the beginning of the year, said it had set aside $3.7bn over the quarter to pay its staff – 27 per cent more than for the same period last year.
With 31,700 employees – about 5,500 of whom are based in the UK – that works out at an average of almost $117,000 each for the three months.
Net revenues in fixed income, currency and commodities trading rose 12 per cent to $2.46bn. Investment banking net revenues were $1.55bn, 29 per cent higher than a year earlier and unchanged from the preceding quarter.
“The firm’s performance was solid, especially in the context of mixed economic sentiment during the quarter,” Lloyd Blankfein, the chief executive, said.
The results came with the bank the centre of attention in a New York courtroom, where a former Goldman trader, Fabrice Tourre, is fighting allegations that he misled investors about a complex mortgage security ahead of the financial crisis.
Goldman is not accused in the case concerning the Abacus mortgage securities, having struck a $550m settlement with the US Securities and Exchange Commission. The bank did not admit or deny any wrongdoing. The trial, which began on Monday, is expected to last three weeks.
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