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Morning Coffee: Goldman Sachs’ big UK bonus bill. The inner circle of investment bankers

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Goldman Sachs’ results may have beat analysts’ expectations in the first half of this year, but its City operation has seen profits slump by more than 60% year-on-year to a mere $335m to June.

Why? Well, the Independent suggests that the soaring share price – and therefore the value of future bonus awards to staff – has made an impact. Expenses were $2.5bn in the first half for 5,700 employees (although this isn’t just pay and bonuses), an increase of $309m. Without this profits only fell 13%.

Meanwhile, Financial News suggests that it’s become much more difficult for investment bankers to get into the inner sanctum of trusted individuals that CEOs turn to for advice. Before the financial crisis, it was common for company boss’s to meet with up to 20 investment bankers on a potential deal, now it’s more likely to be a single individual. Blame the recent culling of senior bankers.

“The CEOs I cover are meeting with fewer ‘inner-circle’ bankers as a result of people departing the industry, either via redundancy or voluntarily since the cost/benefit relationship has changed, coupled with firms pruning their coverage teams and, of course, certain competitors that are no longer in the frame,” said one senior investment banker.

Meanwhile:

The young(ish) who’s who in trading and technology (Financial News)

Ex-Goldman banker forced to pay $500k after admitting fabricating huge positions to protect bonus (Dealbook)

J.P. Morgan had a programme called ‘sons and daughters’ set up in 2006 as friends and family of China’s elite were clamouring for jobs at the bank (Dealbook)

Josef Ackermann named in Zurich CFO’s suicide note (Times)

Allianz cuts 150 support jobs in its fund management arm (FTfm)

Barclays hires top equity researcher in Japan (Bloomberg)

Top paid City lawyers earning at least £1.3m a year (Telegraph)

Bond pays out in wine (Independent)

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