Goldman Sachs rides out the storm
Goldman Sachs Group has delivered its richest quarterly profit in the investment bank's 140-year history, with quarterly earnings of nearly $5 billion.
Goldman posted quarterly profit of $4.95 billion, or $8.20 a share, for the quarter, on revenue of $9.62 billion. In the year-earlier period Goldman had a loss of $2.29 billion, or $4.97 a share, on negative revenue of $1.58 billion.
Goldman's 32,500 employees will receive a bonus payout averaging about a half-million dollars for the year, but the firm sought to deflect criticism by cutting back how much it put into the bonus pool and giving $500 million in charity. The bonus figure for 2009 represented 35.8% of revenues for the year, down from 48% a year earlier.
Chief Executive Lloyd C. Blankfein said the reduction in compensation is a "recognition of the broader environment, resulted in our lowest ever compensation to net revenues ratio."
The Bottom Line:If Mr Cable has his way...
"If Mr Cable had his way, all the big banks would be broken up and bonuses would be virtually eliminated - a sure-fire way in my view of guaranteeing an end to the UK’s ability to compete as an international financial centre. Let’s not forget that this is a man who is on record as saying that everyone who works in a bank has an ‘aristocratic lifestyle’ clearly demonstrating his lack of understanding of the sector." A tough line on bankers’ bonuses could make a brain drain of financial talent a distinct possibility, warns Paul Marsden. Read more