Goldman Sachs’ profit and remuneration soars

by Gill Montia

Story link: Goldman Sachs’ profit and remuneration soars

Goldman Sachs has posted net profit of $4.95 billion for the fourth quarter of 2009, compared with a $2.12 billion loss in the same period of 2008.

The result takes the investment bank’s 2009 net earnings to $13.39 billion, up from $2.32 billion a year earlier, net revenues having more than doubled year-on-year, to $45.17 billion.

Commenting on the results, chief executive Lloyd Blankfein said: “Despite significant economic headwinds, we are seeing signs of growth and remain focused on supporting that growth by helping companies raise capital and manage their risks, by providing liquidity to markets and by investing for our clients.”

Last year, the firm repaid $10 billion to the US Troubled Asset Relief Programme, freeing itself from restrictions on its remuneration policy.

Goldman is paying over $16 billion in compensation and benefits for 2009, having decreased its ratio of compensation to revenue to 35.8%, compared with 48% in 2008.

Despite earnings per common share standing at $22.13 for 2009, the bank’s share price fell sharply overnight on President Barak Obama’s declaration that he intends to curb the riskier activities of US banks, such as the proprietary trading that makes billions of dollars for investment banks.