![David Solomon, Goldman Sachs CEO](https://media.guim.co.uk/4799292681facbd4a39013fbf2de9e9166410674/0_117_3500_2101/1000.jpg)
Goldman Sachs bankers saw their pay and benefits fall by nearly a third in the first quarter, as the end of the investment banking boom contributed to a near halving of profits.
The Wall Street lender said it had put aside nearly $4.1bn (£3bn) to cover the costs of compensating staff over the first three months of the year – an average of $91,116 each for its approximately 43,900 global employees.
The pay pot, which covers salaries, pensions and benefits as well as the best estimate of bonuses that Goldman intends to pay at the end of the year, was down 32% from $6bn a year earlier.
Banker bonuses are expected to fall this year as the investment banking boom, sparked by the gradual easing of Covid lockdown measures last year, starts to wane. It comes as fewer firms raise money on the financial markets and hold back from mergers and takeovers, which together helped push investment banking fees and bank profits to record highs throughout 2021.
Investment banks have experienced a drop in demand this year after Russia’s invasion of Ukraine, which rattled global markets and made companies more cautious about launching deals and fundraising.
“It was a turbulent quarter dominated by the devastating invasion of Ukraine,” said David Solomon, Goldman’s chief executive. “The rapidly evolving market environment had a significant effect on client activity,” he added.
It contributed to a 42% drop in profits in the first quarter to nearly $4bn, down from $6.8bn a year earlier. Revenues tumbled 27% to just under $13bn due to “significantly lower” income from its asset management and investment banking divisions.
The bank was also hit by an increase in loan loss provisions, having put aside $561m to cover potential defaults linked to a surge in credit card customers, as well as the impact of the war in Ukraine. That is compared with the release of $70m last year as banks realised they had put aside too much cash to cushion the blow of potential defaults linked to the Covid crisis.
Separately, Citigroup reported a 46% drop in first-quarter profits to $4.3bn, and said the current economic environment had also affected its investment banking income.