Discontinued Goldman Sachs Irish arm boosts profits

The Irish operations of Goldman Sachs that the banking group decided to discontinue earlier this year contributed the bulk of its operating profits in Ireland in 2012, accounts just filed show.

One of the group's main subsidiaries, Goldman Sachs Ireland Finance Ltd (GSIF), handed back its licence to the Central Bank in January of this year.

The decision to hand back the licence came after the multinational decided to sell its global fund administration business, of which the Irish entity was a part.

Consolidated accounts just filed for Goldman Sachs Ireland Group Ltd show that discontinued operations were the source of $59.8 million (€44 million) of the group's total operating income of $70.5 million earned last year.

Corporation tax
Goldman Sachs Ireland Group made a pretax profit of $206.6 million last year, with $168 million of that amount being a gain on the sale of a subsidiary undertaking. The group paid corporation tax of $6.8 million. The gain of $168 million did not form part of the profits subjected to corporation tax.

In their report the directors said that GSIF conducted a review of its business during 2012 that resulted in the board resolving to voluntarily surrender its banking licence.

Certain parts of its business were transferred to other Goldman Sachs operations.

The group will now support Goldman Sachs global operations by carrying out certain unregulated activities, according to the accounts.

Operating profit
Discontinued operations were the source of the following amounts of operating profit in 2012: investment banking, $0.77 million; investment and lending, $27.6 million; institutional client services, $30.6 million; and investment management, $0.77 million.

The accounts do not include a geographic analysis of its operations, as the group “operates in a single global market”.

The directors of Goldman Sachs Ireland Group Ltd during 2012 were Stephen Davis, Robert Keogh (appointed October 2012), Hugo McNeill (also appointed October 2012) and Dermot McDonagh. Directors' emoluments were $1 million.

The average number of staff during the year was 22, down from 55 in 2011, and total wage costs, including pension contributions, were $6.5 million, down from $11 million.

Total shareholders’ funds at the end of 2012 were $687 million, up from $487 million at the end of the previous year.

The company’s immediate parent is a Goldman Sachs company based in Delaware in the US, called Goldman Sachs Ireland LLC.