Goldman Sachs remains top dog with 7 per cent rise in net earnings

 

The world's top investment bank has maintained its status as Wall Street's darling. Goldman Sachs cruised past analysts' forecasts to post net earnings of $2.26bn (£1.5bn), a 7 per cent rise, and set aside $4.34bn to pay its bankers during the first three months of 2013.

That makes the average pay shared by its 32,000 staff for just three months work at the bank $135,625 – though the leading bankers and traders will pocket far more than that.

Goldman said its compensation ratio fell slightly compared with the first quarter of 2012, with 43 per cent of revenues paid out to staff this time, compared with 44 per cent then.

The investment banking division raked in $1.57bn during the period, up 36 per cent, but Goldman's biggest earner has long been its trading activities.

The driver for the barnstorming first quarter was its Investing & Lending division, which generated $2.07bn.

Investing & Lending covers what the bank does with its own money, and highlights included a $24m gain from investing in Industrial & Commercial Bank of China plus a further $1.1bn from other investments in shares and private equity. However, concerns were expressed at the 10 per cent fall in revenues from client trading, or Institutional Client Services, the firm's biggest moneymaker, which pulled in $5.14bn.

Analysts have frequently complained that trying to predict the firm's earnings is difficult as it provides limited information.

Lloyd Blankfein, paid $21m last year as chief executive, said the bank was pleased with its performance but warned that the potential for "macro-economic instability" was felt during the quarter.

And the bank may not have as many deals lined up for the second quarter as it did for the first.

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