SEC Documents Show Details Of Goldman Profit
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Goldman Sachs Group, whose top executives said earlier this year it’s “difficult to overstate the importance of investment banking,” reported that profit from the business made up just 5.3% of third-quarter earnings.
While banking made up 14%, or $1 billion, of quarterly revenue, high fixed costs including compensation ate up 87% of that amount, Goldman said in a Securities and Exchange Commission filing yesterday. By contrast, trading and principal investments had a lower expense ratio, making up 70% of Goldman’s revenue and 76% of its profit.
The figures underline the firm’s dependence on trading even as Chief Executive Officer Henry Paulson, a former banker, and President Lloyd Blankfein, a former trader, wrote in the firm’s 2004 annual report that “it is difficult to overstate the importance of investment banking to our firm.”
