Costs cut at Goldman as revenues fall

TOTAL costs at the European arm of Goldman Sachs fell sharply in the first half of the year, according to figures published yesterday.

Administrative expenses, which include pay, bonuses and the other major costs of running the business, came to $1.802bn (£1.13bn) at Goldman Sachs International (GSI), down 38 per cent from $2.907bn for the same period last year.

The bank only publishes information on salaries and bonuses at a global level.

GSI, the London-based European division which has about 5,000 staff in Britain, made pre-tax profits of $1.21bn for the six months to 30 June, down 17 per cent from $1.47bn for the same period last year.

Revenue fell to $3.05bn, down 31 per cent from $4.42bn in the first-half of 2010 as the European sovereign debt crisis, the Japanese tsunami and emerging markets inflation all had an impact on the results.

GSI also paid $600m after chancellor George Osborne decided to continue the bank payroll levy brought in by Labour.

No one from the bank was available for interview but the directors’ report said the bank had suffered “significantly lower” revenues in fixed income, currencies and commodities.

“High levels of uncertainty and decreased levels of liquidity during the second quarter of 2011 contributed to difficult market-making conditions and prompted the company to operate at generally lower levels of risk.”

Standard & Poor’s gave GSI a rating for the first time, marking it A+/A-1.

GSI, led by co-chief executives Michael Sherwood and Richard Gnodde, will be subject to intense speculation later this year when it publishes the top executives’ annual bonus figures.