Goldman Sachs Group Inc. announced net revenues of $45.17 billion and net earnings of $13.39 billion. This produced a 22.5% return on average common shareholders’ equity. These statistics were released for the year ended December 31, 2009. These statistics influenced the diluted earnings per common share which increased steeply from $4.47 for last year to $22.13 this year.
Goldman Sachs Group is known for its leadership in worldwide mergers and acquisitions and this year was no different. The group ranked top spot this year in announced and completed transactions. The fourth quarter net revenues were $9.62 billion, with net earnings of $4.97 billion. The net revenues from fixed income, currency and commodities (FICC) were $23.32 billion whereas equities generated net revenues of $9.89 billion.
In 2009, the group brought back the $10 billion preferred stock and the associated warrant which was issued to U.S. treasury pursuant. This was done by paying $318 million in dividends, whereas the amount spent to purchase back the warrant was $1.1 billion. The taxpayers were presented with an annual return of approximately 23%. In this period the firm incurred corporate tax of about $6.44 billion. This resulted in an effective income tax rate of 32.5%.
There was a very contrasting feature observed though. The net revenues in 2009 were found to be only 2% lower than the firm’s record net revenues; however the total compensation and benefits were 20% lower. This represented a reduction of $4 billion.
Consider the following table for a brief idea of net revenues of respective sectors-
|
Category |
Net revenue |
|
Investment Banking |
$4.80 billion, 7% lower than 2008 |
|
Financial Advisory |
$1.89 billion, 29% lower than 2008 |
|
Underwriting business |
$2.90 billion, 15% higher than 2008 |
|
Trading and Principal Investments |
$34.37 billion, significantly higher than 2008 |
|
FICC |
$23.32 billion, approx.8 times higher than 2008 |
|
Equities |
$9.89 billion, 7% higher than 2008 |
|
Principal Investments |
$1.17 billion |
|
Asset Management |
$3.97 billion, 13% lower than 2008 |
|
Securities Services |
$2.03 billion, 41% lower than 2008 |
|
Operating expenses |
$25.34 billion, 27% higher than 2008 |
|
Non compensation expenses |
$9.15 billion, 2% higher than 2008 |
As of December 31, 2009, $255.80 billion was the total capital amount, with $70.71 billion in total shareholders’ equity whereas unsecured long-term borrowings totaled up to $185.09 billion. The dividends on stocks declared were as follows-
|
Type of Stock |
Dividends |
|
Series A preferred Stock |
$239.58 |
|
Series B preferred Stock |
$387.50 |
|
Series C preferred Stock |
$255.56 |
|
Series D preferred Stock |
$255.56 |
|
Series G preferred Stock |
$2,5000 |
