Goldman Sachs, in another sign that banks may be turning around, beat Wall Street’s earnings expectations as it reported a profit of US$1.66 billion for the first three months of this year. The bank also said it planned to raise US$5 billion in stock to help it pay back government bailout funds.
The New York-based bank said it earned US$3.39 per share, easily surpassing analysts’ forecasts for profit of US$1.64 per share. This compares with earnings of US$1.47 billion, or US$3.23 per share, in the quarter ended Feb. 29 of last year.
Goldman’s news, released a day earlier than anticipated, came days after another top-performing bank, Wells Fargo & Co, said it expected to report record first-quarter earnings of US$3 billion, well above Wall Street’s estimates. Investors showed some caution after Goldman’s announcement, which followed the close of regular trading on Wall Street. Goldman shares initially rose in response to its report but then slipped 1.5 percent.
Goldman said profit was bolstered by strong revenue growth in its fixed income and currency businesses. The Treasury market and the dollar were beneficiaries of investor uncertainty during the first two months of the year; last month, the stock market began a five-week rally that lifted the major indexes off 12-year lows.
Results improved significantly over the fourth quarter, when Goldman reported its first quarterly loss since becoming a public company in 1999. Hurt by the plunging value of its investments, especially at its principal trading desk, the firm lost US$2.29 billion during that period.
When Goldman became a bank holding company last fall amid the mushrooming credit crisis, it switched its reporting cycle so its fiscal quarters were in line with calendar quarters beginning Jan. 1. To adjust its reporting schedule, Goldman began fiscal 2009 on Jan. 1 instead of Dec. 1 of last year. The bank said for the month of December, which fell between the change in reporting cycles, it lost US$1 billion, or US$2.15 per share.
Goldman’s first-quarter performance put it in a strong enough position to plan the public stock offering of US$5 billion which it said would be used, with additional resources, to pay back its government debt. Goldman received US$10 billion in government funds during the downturn last fall as part of the US Treasury Department’s program to invest directly in hundreds of banks and try and help alleviate the nearly frozen credit markets.
Goldman executives have said for months that the company wanted to repay bailout funds this year. Many banks have chafed under restrictions, including limits on executive compensation, imposed by the government as it dispensed the bailout money. The banks have also come under sharp criticism from lawmakers and the public for a variety of business practices.
Its earnings improvement lends support to what bank CEOs have been saying in recent weeks: That business conditions have started to stabilize.
The government is aiming to recruit 1,096 foreign English teachers and teaching assistants this year, the Ministry of Education said yesterday. The foreign teachers would work closely with elementary and junior-high instructors to create and teach courses, ministry official Tsai Yi-ching (蔡宜靜) said. Together, they would create an immersive language environment, helping to motivate students while enhancing the skills of local teachers, she said. The ministry has since 2021 been recruiting foreign teachers through the Taiwan Foreign English Teacher Program, which offers placement, salary, housing and other benefits to eligible foreign teachers. Two centers serving northern and southern Taiwan assist in recruiting and training
WIDE NET: Health officials said they are considering all possibilities, such as bongkrekic acid, while the city mayor said they have not ruled out the possibility of a malicious act of poisoning Two people who dined at a restaurant in Taipei’s Far Eastern Department Store Xinyi A13 last week have died, while four are in intensive care, the Taipei Department of Health said yesterday. All of the outlets of Malaysian vegetarian restaurant franchise Polam Kopitiam have been ordered to close pending an investigation after 11 people became ill due to suspected food poisoning, city officials told a news conference in Taipei. The first fatality, a 39-year-old man who ate at the restaurant on Friday last week, died of kidney failure two days later at the city’s Mackay Memorial Hospital. A 66-year-old man who dined
EYE ON STRAIT: The US spending bill ‘doubles security cooperation funding for Taiwan,’ while also seeking to counter the influence of China US President Joe Biden on Saturday signed into law a US$1.2 trillion spending package that includes US$300 million in foreign military financing to Taiwan, as well as funding for Taipei-Washington cooperative projects. The US Congress early on Saturday overwhelmingly passed the Further Consolidated Appropriations Act 2024 to avoid a partial shutdown and fund the government through September for a fiscal year that began six months ago. Under the package, the Defense Appropriations Act would provide a US$27 billion increase from the previous fiscal year to fund “critical national defense efforts, including countering the PRC [People’s Republic of China],” according to a summary
‘CARRIER KILLERS’: The Tuo Chiang-class corvettes’ stealth capability means they have a radar cross-section as small as the size of a fishing boat, an analyst said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony at Yilan County’s Suao Harbor (蘇澳港), where the navy took delivery of two indigenous Tuo Chiang-class corvettes. The corvettes, An Chiang (安江) and Wan Chiang (萬江), along with the introduction of the coast guard’s third and fourth 4,000-tonne cutters earlier this month, are a testament to Taiwan’s shipbuilding capability and signify the nation’s resolve to defend democracy and freedom, Tsai said. The vessels are also the last two of six Tuo Chiang-class corvettes ordered from Lungteh Shipbuilding Co (龍德造船) by the navy, Tsai said. The first Tuo Chiang-class vessel delivered was Ta Chiang (塔江)