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Goldman Sachs announces biggest loss since 1999

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by Kay Mitchell

Former investment bank, Goldman Sachs has reported its first loss since it floated almost a decade ago.

The bank said that losses during the three months to the end of November hit $2.12 billion (£1.41 billion). However, the loss was still less than the market expected and shares gained 4%.

As a consequence of the loss, Goldman said its compensation and benefits payments were $10.93 billion (46%) lower, “reflecting lower levels of discretionary spending due to lower net revenues.”

Chief executive, Lloyd Blankfein, said the bank’s results reflect extraordinarily difficult operating conditions. Mr Blankfein, along with six other senior executives, has agreed to forfeit his bonus.

It has been a difficult year for financial institutions in the US, job losses have been in their thousands while Citigroup, Bear Stearns, Fannie Mae, Freddie Mac and insurance giant, AIG have been bailed out by the US Government.

The Government also pumped billions of dollars into the financial system, while back in September, one of Goldman’s rivals, Lehman Brothers, went bankrupt.

In September, Goldman Sachs along with Morgan Stanley, changed status and received regulatory approval to convert themselves into traditional bank holding companies.

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News posted: December 16, 2008

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