Friday 23 February 2018

Goldman Sachs posts second only quarterly loss since listing in 1999

Philip Whiterow

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 investment bank's loss of $730m (€530m) in the three months to September 30 came as revenues overall fell 60pc to $3.6bn.

With headcount falling 1,300 since June, the performance meant compensation and benefits for 34,200 employees slumped 59pc to $1.6bn in the quarter, from $3.8bn a year ago.

Goldman Sachs has already made a commitment to ensure no more than between 35pc and 45pc 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 44pc.

So far this year, the running total amounts to $10bn, a decline of 24pc 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 61pc over the past three months.

Client services, which includes currencies, commodities, mortgages and other credit products, saw income fall by 13pc.

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 $2.8bn.

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