Goldman Posts $3.46bn Q1 Profit
The Goldman Sachs Group (GS) posted a $3.46bn net income for Q110 on growth in its fixed income business. The firm's fixed income, currency and commodities division generated $7.39bn of quarterly net revenues -- a 13% growth from the previous quarter -- reflecting strong mortgage performance. Mortgages included a loss of $800m, excluding hedges, on commercial mortgages and related securities. Asset management and securities services added $1.34bn of net revenue for the firm, 8% lower than the year-ago quarter. While net revenues in asset management were essentially unchanged from the year-ago quarter, securities services net revenues fell 21% from last year. Goldman attributed the decline to tighter securities lending spreads. Goldman's annualized return on average common shareholders' equity was 20.1% for the quarter. “While we are encouraged by growth prospects for the economy, we continue to put a premium on strong capital and liquidity levels, and disciplined risk management," said CEO Lloyd Blankfein, in the quarterly report (download here). "In light of recent events involving the firm, we appreciate the support of our clients and shareholders, and the dedication and commitment of our people.” The positive results arrive after the Securities and Exchange Commission (SEC) on Friday charged Goldman and one of its vice presidents for allegedly defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages. Goldman reported $881bn of total assets as of March 31, 2010, up 4% from year-end 2009. Total capital at the end of Q110 was $253.35bn. Write to Diana Golobay. Disclosure: the author holds no relative investments.