Goldman Sachs' Dublin profits fall by one-third

PROFITS FELL back by one-third at the Dublin operation of Goldman Sachs last year as income declined by one-fifth.

Accounts lodged at the Companies Office for Goldman Sachs Bank (Europe) show the operation’s income dropped from $110.6 million to $87.2 million in 2010.

After expenses, this saw pretax profits of $58 million being recorded for the calendar year, down from $86.8 million for the previous 12 months.

The bank’s assets dropped by 25 per cent to $9.8 billion over the same period, although a higher retained profit led to a 13.5 per cent rise in shareholders’ funds to $428 million at the end of the year.

A Goldman Sachs website describes the Dublin business as “the flagship banking entity in Goldman Sachs’ European banking strategy”.

In their report accompanying the numbers, the bank’s directors described the 2010 performance as “satisfactory”. They flagged a reduced level of activity “across a wide range of industries and regions”.

“The reduction in profit after tax and total assets is reflective of the business environment in which the bank operates, in addition to various trades maturing in the year.”

The accounts show that the bank’s 11 directors shared total pay of $1.36 million last year, down 18 per cent on the $1.66 million the board received in 2009 when two additional directors were employed for part of the year before they resigned.

The Dublin business is chaired by former European commissioner and attorney general Peter Sutherland, who is also chairman of Goldman Sachs International.

Eight further Irish directors sat on the board at the end of last year: Robert Keogh, Dermot McDonogh, Patrick Mulvihill, James O’Dwyer, Cornelius O’Sullivan, Richard O’Toole, Bryan Strahan and David Went, who is also chairman of The Irish Times Ltd.

Goldman Sachs Bank (Europe) employed an average of 54 staff in 2010, which was up by six on the previous year.

Staff costs declined from $13.4 million to $10.9 million, however, suggesting an average pay of slightly more than $200,000. Two staff members were engaged in trading and sales and the remainder in support, finance, operations and technology.

A breakdown of the bank’s sources of income shows that while its main investing and lending business suffered a 40 per cent drop last year, income from investment banking more than tripled to almost $6 million. Investing and lending is defined as “secured funding activities, loans activity, transactions with the European Central Bank and derivative transactions”.

The business maintained its 2009 policy of not paying a dividend.