Goldman Sachs' posts profits fall after European woes

Revenues tumbled 7.5% to $5.58 billion

Goldman Sachs’ London posted a slump in profits as the dollar’s weakness and eurozone's difficulties hit the banking giant.

Profits at its arm in the capital operation slumped by almost two-thirds last year to $298 million (£177 million).

Revenues tumbled 7.5% to $5.16 billion at Goldman Sachs International (GSI), the US bank’s biggest subsidiary, which oversees Europe, the Middle East and Africa.

Investment banking was strong, thanks to a surge in stock market flotations and equity underwriting.

But institutional client services, which includes fixed income and currencies, were “challenging” and more than 90 jobs were cut. Investment and lending also suffered “significantly lower” revenues. Total staff numbers fell by 200, or 4%, to 5,462 during the year.

The wage and pension bill stayed flat at $3.8 billion — working out at close to $700,000 a head, including employer contributions.

Profits also took a hit because of Goldman’s stock price, up about a third last year, as the bank had to include the rising cost of future share awards for employees.

GSI is headed by co-chief executives Michael Sherwood and Richard Gnodde. The accounts said the unnamed highest-paid director earned $1.4 million for “qualifying services”.

The global parent company has had a tough start to 2014, reporting a fall in profits in the first quarter.