Goldman profits soar on equity trading wins and cost controls
HIGH-PROFILE investment bank Goldman Sachs scored a major success in the first quarter of the year as its focus on trading activities paid off in style.
Profits jumped 41 per cent on the year to $2.7bn (£1.8bn), as revenues shot up 14 per cent to $10.6bn.
By contrast, non-interest expenses only increased six per cent to $6.7bn.
Even there, costs only increased because of increased payouts to successful traders who brought in the revenue boost – compensation costs rose 11 per cent to $4.5bn, while other expenses fell three per cent to $2.2bn.
Equities revenues led the way, rising 46 per cent to $2.3bn, while foreign exchange trading helped fixed income, currency and commodities (FICC) revenues climbed 10 per cent to $3.13bn.
Other investment banking revenues rose seven per cent to $1.9bn, while commissions and fees slipped two per cent to $853m.
Despite the strong results, the bank’s shares slid 0.44 per cent on the day.
Analyst Steven Chubak from Nomura noted that shares “tended to trade poorly” to strong profits when they come from volatile trading revenues as investors fear they may not be sustained.