Goodbody Stockbrokers made €15.8m loss last year amid ‘unprecedented’ sector woes

Goodbody Stockbrokers swung to a loss of €15.8 million last year as fee income slumped amid weak equity markets and money made from its own securities trading book also slid.

The result, reported in new filings with the Companies Registration Office (CRO), compared to a profit of €3.2 million reported in 2021.

Staff at the firm were given a sense last month that the financial performance for this year would also be weak when they were told not to expect bonuses for a second straight full year under AIB’s ownership.

“Our financial results reflect the unprecedented set of challenges faced by investment banks globally in the past two years, and we have taken a number of decisive actions to strengthen our business and position ourselves for long-term success,” said Goodbody chief executive Michael Tormey.

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Goodbody, which was bought by AIB in September 2021 for €138 million, said last month that it was cutting 20 of the 100 jobs in its investment banking unit amid a global slowdown in deal-making and fundraisings and an expected acceleration of large companies leaving the Irish stock market.

The company also acquired Clearstream Solutions, an environmental, social and governance consultancy that has 15 employees, earlier this month for an undisclosed amount. Goodbody had 350 before the job cuts and acquisition were announced.

“We believe these measures align our resources with our longer-term strategic priorities,” Mr Tormey said on Friday.

Commission income slid to €16.9 million from €23.9 million in 2021, amid a dearth of initial public offerings, drop in share placings, and decline in income from client trading in equities, according to the new accounts for Goodbody Stockbrokers Unlimited. Commission income, primarily from the wealth management unit, declined to €43.5 million on the back of a drop in the value of clients’ assets.

Trading income on securities held on Goodbody’s own books, which been the main driver of group profits in 2020 and 2021, plunged by 77 per cent to €747,000, according to the financial statement.

The company also booked €3.6 million of exceptional costs relating to its planned move from its long-standing base in Ballsbridge in Dublin 4 to new offices on Dawson Street in the city centre. While the report said the move had been pencilled in for August of this year, it is understood that the timeline has now drifted to next March or April.

Goodbody appointed former Goldman Sachs and Lloyds Bank executive James Garvey as chairman of Goodbody Stockbrokers in October, following the death of previous incumbent Gary Kennedy earlier this year. Mr Garvey also currently serves as chairman of Martello Expert Services and as a non-executive director on the boards of both S&P Global Ratings Europe and UK.

Non-executive director Joan Kehoe had been acting as interim chair after Mr Kennedy’s death was announced in February following a short illness.

Goodbody revealed in its 2021 report that it was subject to a Central Bank of Ireland enforcement investigation into alleged regulatory breaches for failing to have effective systems in place to spot and report potential suspicious client trades. The firm said in its latest report that “the steps taken to date do not involve any conclusion that there has been a breach of the law by the company or its officers, and the outcome here remains uncertain”.