Goldman Sachs shows big profit fall

Investment bank Goldman Sachs profits were hit by a 6.2 percent increase in operating expenses, which included provisions for litigation and regulatory proceedings of $561 million compared with $260 million a year ago.

Investment bank Goldman Sachs profits were hit by a 6.2 percent increase in operating expenses, which included provisions for litigation and regulatory proceedings of $561 million compared with $260 million a year ago.

Investment bank Goldman Sachs on Thursday reported a 20.6 percent decline in quarterly earnings, as elevated litigation expenses offset higher underwriting revenues from public offerings.

Goldman said on Thursday that it earned $8.04 billion last year, an 8 percent increase from the previous year. In a sign that cost-cutting was bolstering profit, net revenue in 2013 was virtually flat, at $34.2 billion.

Goldman is paying $12.61 billion in compensation and benefits for the year, 3 percent lower than in 2012. The ratio of compensation to net revenue, a widely used yardstick, is 36.9 percent for the year.

That figure was comfortably above 40 percent in the years before the financial crisis. Goldman’s compensation ratio was 43.9 percent in 2007 and 49.2 percent in 2008, amid a steep decline in revenue. (In 2008 and earlier, Goldman’s fiscal year ended in November.)

The ratio came down sharply in 2009, to 35.8 percent, before rising to 39.3 percent in 2010 and 42.4 percent in 2011. Since then, it has been on a downward path.

Net income fell 19 percent, to $2.33 billion, or $4.60 a share, from $2.89 billion, or $5.60 a share, in the period a year earlier.

The most recent results beat average analysts’ expectations of $4.22 a share, according to data from Thomson Reuters. The bank had net revenue of $8.78 billion, beating average expectations of $7.7 billion.

Goldman also disclosed that it had set aside $12.61 billion, or 36.9 percent of net revenue, for compensation in 2013. Those figures are down from 2012, when the bank set aside $12.94 billion, or 37.9 percent.

“Goldman is showing a discipline on compensation that no other bank is showing,” said Brad Hintz, an analyst with Sanford Bernstein.

In a statement Citigroup's chief executive Michael Corbat admitted that his bank "didn't finish the year as strongly we would have liked", but said it has still made "substantial progress".

"We enter 2014 as a strong and stable institution," he said.

Shares in Citigroup fell more than 4% as the markets opened on Wall Street. Goldman Sachs shares rose 0.4%.

Bu Haber için yorum yapabilirsiniz 10.02.2014 18:34:44 207.241.237.236

Yorumlar()