Goldman Sachs sees bumper profit

Posted by RebelData Tuesday, July 14, 2009

US bank Goldman Sachs reported a net profit of $3.44bn (£2.1bn) for April to June, beating analysts' forecasts.

Less volatility in stock markets, rises in global share prices and involvement in many firms' rights issues and takeovers had boosted profits, it said.

The bank said it had set aside $6.65bn for pay and bonuses in the quarter - an average of $226,000 per employee.

Goldman has recently paid off $10bn of government loans it had taken as part of a government bail-out programme.

Its results include a one-off charge of $426m related to the repayment of its government loan under the Troubled Asset Relief Programme (Tarp).

Record revenues

Some have raised questions over whether it is right that a bank make such profits and pay hefty bonuses so soon after receiving government loans.

But analyst William Smith, of Smith Asset Management said: "Goldman should be celebrated, not demonised."

"Things are very fragile but they manage to make money in all environments, which is what you're supposed to do," he added.

Goldman's chief financial officer David Viniar said: "We are helping the economy to recover".
Goldman reported record net revenues of $13.8bn - about 47% higher than it generated in the preceding three months.

Meanwhile, staff remuneration figures takes the bank's average payout per employee for the first half of the year to $384,000.

However, bonuses are not actually finalised until the end of the year - and the figure which is paid out reflects performance over 12 months, it said.

Analysts had already predicted that the annual payout in 2009 for its staff could be nearly $18bn - or an average of more than $600,000 per person.

bbc
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