Everyone wants a job at Goldman Sachs again, says Goldman Sachs
Goldman Sachs is back on top. The 'firm' reported its second quarter results today. Margins are improving, revenues are improving, profits are going through the roof, pay is increasing - substantially - and people are, it seems, flocking to work there.
During the three months to June 30th, profits at Goldman doubled year-on-year. Over the same period, revenues rose only 30%. Goldman is growing, and is becoming a lot more profitable in the process.
Goldman people are being rewarded for their efforts. Total compensation spending was up 30% year-on-year in the second quarter. Accrued pay per head for the first six months of 2013 rose 11%, to $254k. If pay per head continues to be accrued at the same rate, the average Goldman banker will earn half a million dollars for the whole year.
Harvey Schwartz, Goldman's CFO, said the firm is suddenly experiencing some "recruiting tailwinds", with more people wanting to work there. The bank recently said that it only offers 2% of its internship applicants a place. At the same time, Schwartz said Goldman's staff are still very much in demand to work elsewhere, claiming that "Goldman Sachs people are always in high demand and our competitors are always looking to take them over to their firms."
Goldman cut $1.2bn of costs between 2011 and mid-2012. Schwartz reiterated that the bank is now,"'well positioned" for the future. Headcount at the bank is still being cut, but it's more a question of trimming than hacking - just 300 jobs were lost in the past three months and just 600 jobs were lost in the past year.
The only cloud on the happy horizon is Goldman's share price, which fell noticeably when the results were first announced. Goldman bankers may not be too bothered though -over the past year, the bank's share price has risen 66%. This is good news for Goldman's deferred stock bonuses, although Citi's bankers are likely to be happier still - Citi's share price has doubled over the same period.