Goldman Sachs profits drop but beat expectations

Published:  21 Apr at 9 AM

As reported by the BBC, Goldman Sachs has reported that its profits dropped 23% in the last quarter, but still defeated analyst expectations. Net income dropped to $2.1 billion (£1.3 billion) during the first three months of 2012, from $2.7 billion during the same period in 2011.

The bank said that staff salaries and bonuses were $4.4 billion, down by 16% from 2011. Goldman Sachs said that client activity was still relatively low, especially for investment banking. Goldman CEO Lloyd Blankfein said he believed that the mix of businesses offers the firm significant space for revenue growth, while market and economic conditions continue improving.

The firm’s net revenues in investment banking dropped by 9% during the quarter down to $1.15 billion. The bank was recently fined $22 million by regulators from the US, having to clear up charges that certain "top clients" might have been tipped off on stocks. The bank had been accused of lacking policies to avoid leaks from the weekly equity research "huddles".

The bank has been the subject of much criticism recently. Greg Smith, who directed Goldman's equity derivatives firm in Europe, left the business and wrote a scornful editorial in the New York Times, calling its environment "toxic and destructive".