Golden profits for Sachs fires Wall St

GOLDMAN Sachs continued an encouraging week for Wall Street as it posted profits of almost £1bn, writesJamesSalmon.

The US bank, which is facing fresh allegations over its behaviour from a former employee, managed to reassure the markets with its latest figures.

It moved to a £931m profit in the three months to the end of September from a £393m loss in the same period last year. Revenues doubled to £5.2bn from £2.2bn, comfortably beating forecasts.

Most of the gains came from the investing and lending division, which consists of stocks and bonds that Goldman holds as investments.

Income in its investment banking division – including fees for advising on company mergers and acquisitions – also jumped by 49pc to £722m.

Chief executive Lloyd Blankfein said the quarter had been ‘generally solid in the context of a still challenging economic environment’.

The bank said investors were still nervous given the gloomy economic backdrop and that ‘levels of activity remained generally low’.

The results came on the back of encouraging figures from US rivals JP Morgan and Wells Fargo which both beat analysts’ expectations.

But inevitably Goldman’s pay packages came under the spotlight.

Despite slashing 1,600 jobs over the past year and announcing plans during the summer to shave another £310m off its annual costs, Goldman hiked staff pay by 15pc.

It handed almost £7bn to employees in the first nine months of the year, with its 32,600 workers receiving £208,730 on average. This compares with £181,692 earned by 34,200 workers last year. Assuming they continue earning at the same rate in the final three months of the year, the average Goldman employee will receive a total pay package of £278,307.

Yesterday there were fresh allegations from former employee Greg Smith, who had claimed in a leaked resignation letter in March that senior staff had referred to clients as ‘muppets’.

In a leaked extract from his forthcoming book, Smith claims that interns were subjected to 5am ‘boot camp’ grillings and humiliating dressing downs from senior staff.