Goldman Sachs makes a loss
Tuesday 18 October 2011
Goldman Sachs has posted only its second quarterly loss since it listed in 1999 as market turmoil hit the Wall Street giant's performance.
The bank's loss of 730 million US dollars (£465 million) in the three months to September 30 came as revenues overall fell 60% to 3.6 billion US dollars (£2.3 billion).
With headcount falling 1,300 since June, the performance meant compensation and benefits for 34,200 employees slumped 59% to 1.58 billion US dollars (£1 billion) in the quarter, from 3.83 billion US dollars (£2.4 billion) a year ago.
Goldman Sachs has already made a commitment to ensure no more than between 35% and 45% of revenue is paid to staff - a lower proportion than any other Wall Street bank.
In the first nine months of this year, the ratio of compensation and benefits to net revenue was 44%.
Goldman staff, of whom 6,000 are based in the UK, received a total of 15.4 billion US dollars (£9.6 billion) in pay and bonuses last year - equivalent to around £270,000 per employee.
So far this year, the running total amounts to 10 billion US dollars (£6.4 billion), a decline of 24% on a year ago with these latest quarterly figures pointing to lower bonuses for the year overall.
Underwriting fees, which Goldman earns by guaranteeing and organising new issues of bonds and shares, dropped by 61% over the past three months.
Client services, which includes currencies, commodities, mortgages and other credit products, saw income fall by 13%.
But the biggest fall was in investing and lending where a large loss was blamed on the fall in equity and credit markets and a write-down of an investment in China.
Chief executive Lloyd Blankfein said he was disappointed by the group's loss and added that the results were significantly hit by an environment of weak investor and company confidence and the uncertain macroeconomic and market conditions.
"The strength of both our client franchise and balance sheet positions us well for when economies and markets improve," he said.
In the same quarter a year ago, Goldman made profits of 2.8 billion US dollars (£1.78 billion).
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