GOLDMAN SACHS has surprised investors by reporting lower than expected revenues in the last three months of the year as a sharp fall in income from fixed-income trading was only partly offset by a rise in investment banking activity.
Shares in Goldman had fallen more than 2 per cent by early afternoon in New York yesterday after it reported fourth-quarter earnings per share of $3.79, down 54 per cent from a year ago but in line with analysts’ forecasts. Its $8.6 billion in revenues for the quarter fell shy of Wall Street expectations.
The lacklustre quarter capped a difficult 2010 for Goldman, marked by a $550 million settlement with US regulators over fraud allegations and a public backlash against its pay and practices.
With an influential US Senate report that will delve into Goldman’s behaviour during the financial crisis expected soon, the bank cut its total bonus and salary pool by 5 per cent, leaving its 35,700 employees to share $15.4 billion or about $431,000 each, some 13 per cent less than in 2009. Goldman set aside about 40 per cent of its revenues to pay employees in 2010, more than the last year but below the 45-46 per cent seen before the crisis. – (Copyright The Financial Times Limited 2011)
