(Reuters) – Goldman Sachs Group Inc’s fourth-quarter profit fell 56 percent as trading and investment banking revenue plunged, but the bank managed to beat analysts’ expectations through cost cutting and lower taxes.
Goldman’s results on Wednesday reflected the weakest year for Wall Street since the financial crisis. As politicians and policymakers battled over ways to handle Europe’s sovereign debt burden, market volatility surged and Wall Street’s clients pulled back on risk-taking, held off on acquisitions and delayed stock and bond offerings.
Wall Street banks cut tens of thousands of jobs and drained bonus pools to respond to the slowdown in business throughout 2011.
Goldman’s payroll declined by 2,400 employees during the year, reflecting job cuts across trading, banking and back-office operations. The bank slashed compensation 21 percent to $12.2 billion, or $367,057 per employee, from $15.4 billion, or $430,700 per employee, in 2010.
“Goldman is adjusting and continuing to operate reasonably well in a difficult environment,” said Gary Townsend, president of Hill-Townsend Capital. “I would prefer to see them investing more in their operations,
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