Bailed-out Goldman makes huge profit
Updated on 14 July 2009
Bailed-out bank Goldman Sachs has continued its extraordinary rebound to make a huge £2.1 billion profit for the second quarter of 2009.
After accepting £6.1 billion of taxpayer bail-out cash and benefiting from a host of other US government programmes nine months ago, the Wall Street giant defied analysts' expectations by saying quarterly earnings are 33 per cent up on strong trading results.
The US Treasury was forced to prop up the nation's largest banks with £77 billion of taxpayers' dollars. The banking crisis saw the collapse of Bear Stearns, which sent Lehman Brothers into bankruptcy and forced a Merrill Lynch-Bank of America tie-up.
Goldman said it has set aside £4.1 billion for salary, bonuses and benefits in the quarter which puts the average employee of the firm on course to earn more than £552,000 this year.
It is the first major US bank to report second-quarter results and said trading income nearly doubled from a year ago, while its equity underwriting business produced record revenue of £452 million.
Chief Financial Officer David Viniar said: "There's less competition out there."
Second-quarter results were tempered by a one-time £261 million charge related to Goldman's repayment of the multi-billion pound bail-out.
Mr Viniar said there was "no timeline" for the bank to buy back stock warrants issued to the US government under the Troubled Asset Relief Programme (TARP).
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