Goldman Sachs makes surprise profit | News | Al Jazeera

Goldman Sachs makes surprise profit

US bank's $1.66bn profit beats forecasts as it unveils plan to pay back bailout funds.

    Goldman Sachs reported a net loss of $2.12bn in the fourth quarter than ended on November 28  [EPA]

    The bank has said it is keen to repay Tarp money as soon as possible in order to avoid the restrictions that come with the scheme - which would include limits on executive compensation.

    Stock market surge

    World stocks rose towards a three-month high in reaction to the announcement.

    Some analysts said the results, which follow Wells Fargo & Co's surprising announcement last Thursday that it expects to report a record first-quarter profit, were a sign the US banking industry is stabilising.

    "It's another sign that the financial sector has gone through the worst," Keith Wirtz, president and chief investment officer at Fifth Third Asset Management, said.

    But it was not all positive news from the bank as it had earlier reported it lost $1bn in December 2008, mainly due to trading and investment losses.

    December was reported separately for the first time on Monday as Goldman and Morgan Stanley have both changed their financial years to match calendar years.

    'Rare opportunity'

    The reporting move prompted some to question whether the change in financial years had allowed Goldman to dump much of its bad news into that one-off period and start afresh in the first quarter.

    Goldman Sachs has posted just one quarterly loss since the middle of 2007 - a net loss of $2.12bn in the fourth quarter that ended November 28 - even as competitors have posted several quarterly losses, or gone out of business.

    Goldman also disclosed that it has set aside $168,901 per employee on average for compensation in the quarter, almost 35 per cent more than in the first quarter of the previous fiscal year.

    The figure is likely to raise eyebrows given concerns expressed by legislators and others about excessive compensation on Wall Street.

    SOURCE: Agencies


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