Profits at Goldman Sachs arm fall 15%

PRETAX PROFITS at Dublin-based Goldman Sachs Bank (Europe) plc fell by 15 per cent to $49.1 million (€39.2 million) last year .

Operating income at the bank fell by 13 per cent from $87.1 million to $75.4 million, according to accounts filed in the companies office.

According to the directors’ report: “The reduction in profit is reflective of the business environment in which the bank operates. Total operating income decreased year on year, primarily due to a reduction in net interest spread, reduced gain on financial instruments at fair value offset by increased fees and commission income.”

The bank had total assets of $11.6 billion at the end of the year and the directors says “the growth in total assets is primarily driven by increased banking activity”.

The directors state they consider the year-end financial position of the bank satisfactory.

The bank paid $6.2 million in Irish corporation tax to give a post-tax profit of $42.8 million.

The filings show bank revenues were made up of net interest income totalling $27.4 million while it increased by 10 per cent its fee and commission income from $41.9 million to $46.2 million. A breakdown shows the bank generated $37.6 million from institutional client services that include hedge fund administration; $32.3 million from investing and lending; $4.9 million from investment banking; and $450,000 in investment management.

At the end of December, the bank had shareholder funds totalling $471 million that included accumulated profits of $200 million.

The bank had cash of $230.6 million and did not pay a dividend last year.The downturn in the Dublin-based business has also negatively impacted on the value of Peter Sutherland’s share in the bank.

The former Irish attorney-general and EU commissioner is chairman of the bank. Returns show Mr Sutherland increased the number of shares he owns in the bank last year from 21,597 to 24,667. However, the price per share tumbled from $168 in December 2010 to $90 in December 2011 resulting in the value of Mr Sutherland’s shares going from $3.62 million to $2.23 million. At yesterday’s share price of $97, Mr Sutherland’s shares are worth $2.39 million.

Numbers employed total 55 and last year they shared a pay-pot of $9.45 million.