Photo: Panache Privee
Goldman Sachs posted its second quarterly loss in twelve years today.In the bank’s post-IPO history, it had only reported a loss one other time: during the crisis.
Everyone’s pointing to Goldman’s lower trading revenue for the third-quarter at Goldman, which disappointed (as expected) by coming in at $4.06 billion, down 13% from $4.67 billion in the third-quarter a year earlier.
Today Bloomberg named and shamed those responsible.
First, some background. The unit most responsible for the losses is:
Fixed-income, currencies and commodities, typically the firm’s biggest source of revenue, dropped 36% to $1.73 billion from $2.69 billion a year earlier and increased from $1.6 billion in the second quarter. Equities trading revenue rose to $2.33 billion from $1.98 billion a year earlier and from $1.92 billion in the second quarter.
Second, here are the people responsible for those drops in the bank’s trading –
- Edward K. Eisler:He’s the head of interest rate trading.
- David B. Heller: He’s also a co-head the securities unit. He was once rumoured to be a bidder for the New York Mets baseball team. He also owns a $7.2 million Hampton’s home.
- Pablo J. Salame: He’s a co-head of the securities unit. He moved from New York to the London offices this summer. Salame, an Ecuadorian, has been with Goldman since 1996 and became a partner in 2000.
- Harvey M. Schwartz: He’s a co-head of global sales and a co-head of the firm’s securities division.
Investment banking revenue was down too. It came in at $781 million for the quarter, compared to $1.16 billion in the third-quarter in the previous year. That’s a 33% decline year over year.
But there’s some good news, as Bloomberg reports:
The company ranks No. 1 among advisers on global takeovers announced this year and also has the top spot among managers of global equity and equity-linked offerings, according to data compiled by Bloomberg.
Here’s who runs Goldman’s I-banking division.
- Richard J. Gnodde: He was named a co-head of the bank’s investment banking division this year. Gnodde, a South African native, has been with Goldman since 1987 and has played a major role working to build the bank’s European M&A business.
- David M. Solomon: He’s also a co-head of investment banking. Solomon was poached from Bear Stearns in 1999. There’s been a lot of speculation that he’s the “dark horse contender” for succeeding Lloyd Blankfein as chief executive.
- John S. Weinberg: He’s a vice chairman and a co-head of investment banking at Goldman. His late father was a prominent Goldman banker.
Photo: Courtesy of Bloomberg
A handful of these guys are among the people who took home more than $10 million in bonuses in 2010, but this year the compensation pool has contracted.The pressure is on the traders listed above to boost trading revenues for the next quarter.
CEO Lloyd Blankfein is a trader, he relied on trading to boost Goldman’s earnings in the past, and he said about earnings today that he’s “disappointed.“
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