Share price dips despite jump in Goldman profit

Tim Wallace
Follow Tim
GOLDMAN Sachs’ profits increased in the first quarter of the year, the bank reported yesterday, as investment banking and management incomes improved.

But the Wall Street giant’s shares fell on the day as investors were disappointed with revenues in the bank’s client trading business.

It also emerged the bank has gained approval from UK regulators to open a new private banking arm in Britain. It is allowed to take deposits and advise on investments.

Pre-tax profits increased six per cent on the year to $3.4bn (£2.2bn).

Overall revenues increased 1.4 per cent on the year to $10.1bn, driven by improvements in debt and equity underwriting which rose 63 per cent to $1.1bn.

Equity securities revenues also expanded, growing 2.8 per cent from $891m in the first quarter of 2012 to $1.1bn in the same period of this year.

However other areas did not perform as well.

Net revenues in fixed income, currency and commodities fell seven per cent to $3.2bn, and revenues in client equities fell 14.6 per cent to $1.9bn.

Net revenues in institutional client services fell 10 per cent to $5.1bn.

“We are pleased with our performance for the quarter,” said chief executive and chairman Lloyd Blankfein.

“Still, the potential for macro-economic instability was felt in the quarter and constrained overall corporate and investor activity.”

Staff levels dipped 400 to 32,000 and average compensation rose a touch to $135,593 in the quarter. Return on equity came in at 12.4 per cent in the quarter.