Investment bankers at the London headquarters of Goldman Sachs are on course to collect bigger bonuses this year after riding the wave of City dealmaking.
Goldman worked on a bumper crop of deals in the first half of the year, helping to drive investment banking revenues in London 45 per cent higher to $856 million, according to accounts filed by Goldman Sachs International.
Goldman is the sole adviser to RSA Insurance, whose chief executive, Stephen Hester, completed a £750 million rights issue this year, along with several disposals, including in China and Canada. The bank also advised Punch Taverns on the pub group’s complex debt restructuring and worked for Balfour Beatty on its rejection of a bid proposal from Carillion.
Goldman helped to list Saga, the travel and insurance business for the over-50s, and Just Eat, the online takeaway group.
The bank’s half-year accounts for its London division show that revenues from financial advisory work rose by 37 per cent on the same period last year, from $169.6 million to $233 million. Revenues from underwriting debt and equity deals soared by 48 per cent to $623.3 million. Pre-tax profits more than tripled, from $335 million to $1.1 billion, although the performance last year was skewed by one-off tax hits.
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Goldman’s directors described the figures as merely “satisfactory”, but its London investment bankers will be hoping to reap the rewards of their advisory work during the annual bonus round in February.
Goldman’s wages bill rose by 18 per cent to $2 billion over the first half, according to the accounts, which the bank said reflected its increased revenues and staff costs at some affiliate businesses.
The bank did not reveal how much it had set aside to cover its bonus payouts, but its top bankers are among the best rewarded in the City. The average Goldman banker received £230,000 in pay and bonuses last year, although the gulf between the amounts paid to junior staff and the big-hitting “rainmakers” can be enormous.
Like its peers in the European Union, Goldman Sachs International is bound by new rules that limit annual bonuses to 100 per cent of salary. It has responded by increasing base pay and introducing a system of allowances.