GOLDMAN Sachs smashed its $100m (£66.7m) plus trading day record by 41 days in 2009, despite taking on greater trading risks during the year.
On 131 days last year the investment bank made at least $100m in net trading revenues, up from 91 days in 2008, according to an annual report filed with the Securities and Exchanges Commission yesterday.
Out of a total of 263 trading days, the bank lost money on 19 days, although its daily losses never exceeded $100m.
Goldman calculated that the most it could have lost on any one day – or “value at risk – was $218m, up from $180m during the previous year.
The rise in value at risk was “principally due to an increase in the interest-rates category,” and a “reduction in the diversification benefit across risk categories,” the bank said.
Goldman bet more aggressively than ever on stock prices, interest rates and other asset classes.
This high profit and volume trading helped it earn a record $13.4bn in 2009, as net revenues more than doubled to $45.2bn. Two-thirds of its revenue came from trading and investing.
Traders said they were not surprised by the performance given the collapse of its rivals Bear Stearns and Lehman Brothers in 2008.
But analysts warned the uncertain outlook for the markets compounded by a tightening of financial services regulation meant Goldman would struggle to repeat or better the performance in 2010. Competitors are also likely to recover over the course of the next year.
Despite the strong performance, Wall Street’s dominant bank has been criticised for paying billions of dollars in bonuses so soon after the taxpayer bailout of the banking industry.
But the bank has rejected demands from shareholders that the firm investigate recent compensation awards, recoup excessive compensation and reform pay practices.
Goldman reported the shareholder demands last year and said at the time that its board was considering them. The firm did not name the shareholders who made the demands.
It was on pace to pay more than $20bn in compensation heading into the fourth quarter but, facing public ire, it capped compensation expenses at $16.2bn for the year. The firm also paid its top 30 executives all-stock bonuses rather than cash.
Even though Goldman outperformed its biggest rivals in 2009, chief executive Lloyd Blankfein received a stock bonus valued at $8.9m, roughly half of what JPMorgan Chase chief Jamie Dimon received.