Goldman Sachs protected London employees while 2023 revenues plummeted
2023 was a bad year for Goldman Sachs employees in London. But it could have been worse.
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Accounts released today for Goldman Sachs International, the London-based branch of Goldman Sachs, reveal that revenues in the investment banking and fixed income trading divisions, were down 40% or more last year compared to 2022.
As the chart above shows, London's declining revenues in fixed income trading and investment banking were mitigated by a 54% increase in revenues in investment management and a 20% increase in revenues in equities sales and trading.
Increased revenues in investment management were illusory, however, and resulted from a $1.42bn gain from the transfer of Goldman Sachs UK asset management business to Goldman Sachs Asset Management International. Without this, asset management revenues would have fallen 28%.
The only area of Goldman's London business that really did well in revenue terms last year, therefore, was equities sales and trading. Here, Goldman said the increase was entirely down to prime financing, the business which deals with hedge funds. And within prime financing, it said the increase was mostly down to «Global Core Liquid Assets (GCLA) held as cash deposits» in a higher interest rate environment. Revenues from equities market making fell.
In other words, rising revenues were largely the result of collecting interest payments on hedge funds' cash deposits. Nonetheless, Goldman was gentle with employees.
As the chart above shows, headcount was cut by less than the decline in revenues in key divisions.
Asset management employment at Goldman Sachs International fell 37% in 2023. However, this was the result of shifting 300 employees into
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