Goldman Sachs' results confirm rates traders probably won't be paid

Goldman didn’t have the best time in Q3, compared to its peers. But its rates traders possibly had the worst time of the lot. 

Get Morning Coffee ☕ in your inbox. Sign up here.

Fixed income currencies and commodities trading revenues at Goldman were down 12% in the third quarter, compared to an increase of 9% at Bank of America. As the chart below shows, Goldman's FICC performance relative to the previous year was the worse of its peers.

Why was this? The bank itself blamed significantly lower revenues in intermediation, which were down by 24%, with "interest rate products and commodities" the main culprits, despite higher revenues from currencies and credit.

The poor third quarter in macro trading came after a difficult first half for Goldman's macro traders, too. Regulatory filings tracking both realized and unrealized losses suggest the firm's rates traders ended in the first half up $324m versus $1.6bn last year.

The decline in FICC revenues might explain why Goldman cut spending on pay in Q3, which went from $91k per head in Q3 of 2023 to $89k in the same period of 2024.

It might also explain why Goldman's rates traders are leaving, including Pushkar Jha, the firm's London head of rates trading, as well as Paris-based Shahil Ghelani, both earlier this year.

If rates traders are struggling, Goldman's equities traders appear to be thriving, up 18% in Q3 of 2024 compared to last year, with both cash and derivatives products contributing to the growth in intermediation revenue.

One bright side is that Goldman is at least hiring students again. The third quarter is when new graduates arrive. The firm’s headcount increased by 2,100 during the quarter, way ahead of the 1,300 it increased during the same period last year, and on par with the increase in 2022.

Have a confidential story, tip, or comment you’d like to share? Contact: +44 7537 182250 (SMS, WhatsApp or voicemail). Telegram: @SarahButcher. Click here to fill in our anonymous form, or email editortips@efinancialcareers.com. Signal also available.

Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)