GOLDMAN Sachs momentarily shifted attention away from its legal wrangle with the US securities regulator yesterday when its first quarter results smashed Wall Street forecasts.
The embattled behemoth almost doubled its net profits to $3.5bn (£2.3bn) or $5.59 per share, up from $1.8bn or $3.39 per share this time last year. Revenues rose 36 per cent to $12.8bn in the three months.
Amid ongoing furore over banking sector pay in the wake of the financial crisis, Goldman handed staff a $5.5bn remuneration pool – equal to an average of $166,000 per employee. Although this was an increase on the same quarter in 2009, it was lower than the amount distributed in 2007’s boom-year bonanza.
Chief executive Lloyd Blankfein made a brief reference to the Securities and Exchange Commission’s allegations of mortgage fraud against the bank. He said: “In the light of recent events involving the firm, we appreciate the support of our clients and shareholders. and the dedication and commitment of our people.”
But Blankfein notably ducked out of Goldman’s following conference call, leaving it to finance director David Viniar to claim the group benefited from the diversity of its interests. Strong trading and bond underwriting helped push investment banking revenues 44 per cent higher to $1.2bn. Turnover from fixed income, currencies and commodities trading rose 13 per cent to a record high of $7.4bn. Around $510m came from proprietary trading, an area Washington is keen to clamp down on.
Shares in Goldman, which plunged 13 per cent to $160.70 after the SEC announced its case, dropped 2.1 per cent yesterday closing at $159.98.