Bank bonus tax cost Goldman Sachs $600m

Head of Goldman Sachs, Lloyd Blankfein, said activity dropped in the second quarter. Photograph: Ramin Talaie/EPA

Alistair Darling’s one-off bank bonus tax cost Goldman Sachs $600m (£395m), the Wall Street bank said today as it revealed that its wage and bonus bill reached $9.2bn in the first half of the year – $235,000 per employee.

The firm also took a $550m hit from its record-breaking settlement with the securities and exchange commission over its Abacus collateralised debt obligation, which Goldman admitted had contained some misleading sales material.

Lloyd Blankfein, Goldman’s chairman and chief executive, acknowledged that activity had dropped off in the second quarter of the year, a trend that has been reported by other US investment banks.

“The market environment became more difficult during the second quarter and, as a result, client activity across our businesses declined,” said Blankfein.

Net revenues for the three months to the end of June were $8.8bn, down 36% on the same period a year ago and down 31% on the previous quarter.

The accrual for compensation and benefits expenses was $3.8bn in the second quarter of the year, taking the bonus and pay pot for the second half of the year to $9.2bn. The firm, which employs roughly 39,000 people, said this gave a ratio of compensation to net revenues for the second quarter of 43% which it was lower than the 49% it set aside in the same period last year.

Revenue for the six months to the end of July was $21.6bn, down 7% on the same period last year while the compensation pot was down 18% on the same period.

But the firm’s profit – net income – was down 82%, greater than had been expected, at $613m compared with $3.4bn a year earlier.

The admission by Goldman that it contributed £395m of the £2.5bn that Darling’s bonus tax raked in, comes after JP Morgan and Citi paid a combined £500m in the tax.