Bankers' £4.1bn bonus bonanza

Jul 15 2009 by Iain Laing, The Journal

STAFF at investment bankers Goldman Sachs earned a mammoth £4.1bn in pay and bonuses during a bumper second quarter for the group.

Compensation and benefits were 47% higher to reflect revenues soaring to a record £8.5bn as improving financial markets buoyed the business.

The bank, which has more than 5,000 staff in the UK, also delivered a 65% rise in second-quarter profits of £2.1bn – well above expectations.

Chief executive Lloyd Blankfein said: “While markets remain fragile and we recognise the challenges the broader economy faces, our second quarter results reflected the combination of improving financial market conditions and a deep and diverse client franchise.”

Goldman Sachs took £6.1bn from the US Government’s bail-out funds at the height of the crisis last October, but repaid the cash in June.

Goldman’s strong results underline its status as one of the strongest players on Wall Street and sent bank stocks higher in London. Other major US banks are also due to report this week.

Goldman generated a record £4.2bn in revenues from fixed income, currency and commodities trading during the second quarter, with a strong performance in credit and interest rate products and currencies.

Revenues from equity trading rose 28% to £2bn with business helped by solid client activity, less volatility in markets and strong rises in global share prices.

The bank also gained from several firms raising funds from shareholders through rights issues.

Goldman said revenues from underwriting – where the bank agrees to buy any shares not taken up by investors in return for a fee – rose 21%.