How a calm stock market hit Goldman Sachs traders causing its worst quarter on record for commodities

Goldman Sachs suffered its worst quarter on record for commodities since the end of 2015

Goldman Sachs suffered its worst quarter on record for commodities over the three months to June – but the US bank is still set to squirrel away around £10billion for its staff this year.

Fixed income, currencies and commodities revenues at the firm came in at around £890million over the quarter, a like-for-like drop of 40 per cent, and the division’s worst three months since the end of 2015.

Goldman put the poor performance down to calm stock markets which led to low volatility and a lack of client interest.

The firm’s bond rout is even worse than that of peers Citigroup, Bank of America, and JP Morgan Chase, which have reported bond trading declines of 6 per cent to 19 per cent following historically high levels of volatility.

Finance boss Martin Chavez told analysts its commodity arm suffered its worst quarter since it listed as a public company.

‘We are a market leader in commodities, but it was a challenging environment on multiple fronts,’ Chavez said. He declined to provide a specific value on what the firm lost on commodity trading.

Although a fall in Goldman’s fixed income department was largely expected, analysts said the bank may have to do more to adjust to new market dynamics.

Despite this poor performance, Goldman has already set aside £5billion to pay for its staff over the first half of the year.

If the pot was as big in the second half of the year, the firm’s 34,100 staff would share £10billion between them, which works out at more than £293,000 per employee.

As a whole, Goldman’s income came in at around £1.4billion in the second quarter, down from the £1.7billion reported in the first three months of 2017 and only slightly higher than the amount it reported for the same quarter last year.

Meanwhile earnings per share came in at £3.03, compared with analyst estimates of around £2.60. This is also up from £2.85 in the second quarter of 2016.

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