Goodbody Stockbrokers is on track to post a full-year profit for the first time in three years, according to sources, after the firm saw its pretax loss narrow by more than half in 2023 to €7 million.
Total revenue increased by 12.4 per cent to €73.3 million, even as its fee and commission income declined in its wealth management and investment banking divisions, according to the firm in its latest financial statement, filed with the Companies Registration Office.
The overall increase, however, was driven by so-called other income, including commissions from structured product transactions and interest margins earned on placing clients’ money on deposit, which rose 81 per cent to €18.1 million.
As of the end of last year, some €3.7 billion of client funds were on deposit in bank accounts opened by Goodbody on their behalf. Irish banks were offering rates of as much as 3 per cent on certain products as of late last year, following a series of increases in central bank rates.
Trading income on securities held on Goodbody’s own books jumped to €2.81 million from €747,000 booked in 2023.
However, administrative expenses rose almost 5 per cent to €83.1 million, driven by wage costs as average staff numbers increased to 375 from 354 for the previous year.
Goodbody, which was bought by AIB in September 2021 for €138 million, and which is currently led by chief executive Martin Tormey, cut 20 jobs in its investment banking unit last autumn amid a global slowdown in deal-making and fundraisings and an expected acceleration of large companies leaving the Irish stock market.
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However, this was more than offset as it acquired Clearstream Solutions, an environmental, social and governance consultancy that had 15 employees; some AIB staff transferred to Goodbody with an equity capital unit; and the firm continued to hire in its wealth management division.
The latest accounts reveal that Goodbody paid €2.98 million for an initial 75 per cent stake in Clearstream. It has an option to buy the remainder in 2026.
Goodbody secured €4.22 million in gross proceeds from the sale of its funds administrative unit to Dutch-based professional services company TMF Group, the accounts disclosed.
Sources said Goodbody is on track to return to profitability this year. That is even after the firm was fined €1.23 million by the Central Bank in February for failing to put in place an effective system to monitor for suspicious trading activity.
The regulator found at the time – following an enforcement investigation first disclosed in Goodbody’s 2021 report – that the stockbroking firm breached European Union market abuse regulations (MAR) for a five-year period between July 2016 and January 2022 as a result.
The investigation found that during the 5½-year period in question, Goodbody failed to put in place an effective trade surveillance framework to monitor, detect and report suspicious orders and transactions in relation to market abuse. The regulator did not find that Goodbody had actually missed suspicious trades during the period.
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