Goldman Sachs: Lower pay ratio boosts profits

GOLDMAN Sachs reported third-quarter earnings that surpassed analysts’ estimates as it set aside a smaller portion of revenue to pay employees than in the first half of the year. Net income rose 48 percent to $2.24 billion (R24.8bn) from $1.52bn a year earlier, the group said yesterday. Profit topped the $3.21 average estimate of 22 analysts surveyed. The results marked the second consecutive year Goldman beat third-quarter estimates by eschewing its traditional practice of allotting the same percentage for pay in each of the first three quarters of the year before adjusting the amount in the last period. Chief executive Lloyd Blankfein has sought to limit expenses to keep return on equity above 10 percent, while he waits for the trading environment to improve. Compensation, the biggest expense, was 33 percent of revenue, compared with 35 percent a year earlier. – Bloomberg