Goldman earns $3.3-billion
Stevenson Jacobs
07:30 EST Tuesday, Apr 20, 2010
NEW YORK — Goldman Sachs Group Inc. said Tuesday its first-quarter earnings almost doubled to $3.3-billion (U.S.) as its trading business again surpassed the rest of the financial industry. It was a bit of good news for the bank as it faces a government civil fraud charge.
Goldman Sachs earned $5.59 a share on revenue of $12.78-billion as bond, commodities and currency trading buoyed its profits for yet another quarter. That was well above expectations of analysts surveyed by Reuters Thomson.
Goldman Sachs also reported sharply higher fees from underwriting stock and debt offerings.
The company said it set aside 43 per cent of revenue in the first three months of the year to pay employee salaries and bonuses, down from 50 per cent for the same period last year. However, the actual amount for compensation set aside in the quarter rose 17 per cent from last year to $5.5-billion.
Banks' high levels of compensation, including bonuses, have come under heavy criticism since the financial crisis that began in 2008. Lawmakers and the public have complained that the banks were rewarding the same employees whose risky trading practices helped plunge the country into recession.
The bank's stock rose almost 1 per cent in pre-opening trading.
Goldman, which has outperformed other financial companies for years, has been the strongest bank throughout the financial crisis. It had less exposure to toxic mortgage-backed securities than other companies and also has been more aggressive in its trading.
Yet the firm is facing its biggest challenge ever after being charged Friday in a civil fraud lawsuit by the Securities and Exchange and Commission. The SEC alleges that Goldman and one of its vice presidents misled investors who bought complex financial products that were expected to fail.
Goldman CEO Lloyd Blankfein in a statement thanked the bank's supporters without specifically mentioning the SEC case.
“In light of recent events involving the firm, we appreciate the support of our clients and shareholders, and the dedication and commitment of our people,” he said.
