Goldman optimistic despite profits fall

Regulators and rivals conspired to take a chunk out of Goldman Sachs profits in the first three months of this year.

The investment bank that everybody loves to hate recorded a 21 per cent fall in underlying profits, as trading revenues slumped from their bumper quarter at the start of 2010. The year before, rival banks had been too timid or cash-strapped to mount a challenge, and Congress had yet to pass new laws curbing proprietary trading and derivatives businesses.

Goldman recorded net earnings of $2.7bn for the three months to the end of March, a bottom-line figure depressed by the payment of $1.64bn in dividends when it repaid money it had borrowed from billionaire Warren Buffett at the height of the 2008 financial panic.

In its important fixed income, currencies and commodities trading division, revenues slumped 28 per cent to $4.3bn, though improvements in investment banking advisory fees and asset management work helped offset some of the decline, the bank said.

David Viniar, Goldman's chief financial officer, said that the bank's clients had become more cautious and that its market share in trading had fallen, to what he called a "more normalised" level. Clients are still worried about the economic and regulatory environment, he said, and Goldman itself still characterises the climate as uncertain. The repayment of Mr Buffett came after the Federal Reserve ended curbs on major banks returning money to shareholders last month.

Goldman put its compensation costs at $5.2bn for the first quarter, adding together salaries and benefits paid already and money set aside for year-end bonuses. That figure is down 5 per cent from the same period last year. With a total employee count of 35,400, that works out to about $148,000 per employee so far this year.

The equivalent figure this time last year was $166,000, and Goldman bankers went on to earn an average $430,700 in 2010.

Lloyd Blankfein, chief executive, declared himself pleased with the quarter's results and sounded an optimistic note for the immediate future. "Looking ahead, we continue to see encouraging indications for economic activity globally."

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links