Last month four of the US banking giants announced their third quarter financial results. With the banking sector in doldrums, every quarterly result announcement is being awaited for some good news and being scrutinized by analyst like never before. All these four banks were among the biggest recipients of payouts from government. Lets analyse their financial statements to understand what they did right and what went wrong.

Gold Man Sachs

A year after receiving government aid, Goldman Sachs Group had an impressive third quarter with profits of $3.19 billion , or $5.25 a share up from $845 million, or $1.81 a share, a year earlier. Overall the bank doubled its revenue to $12.4 billion from $6.04 billion last year. In spite of having a record level of capital the firm managed an impressive return on equity of 21.4% compared with 7.7 percent in the third quarter of 2008.

Segment wise the bank registered strong performance in its fixed-income, currency and commodities business. Revenue in these segments more than tripled to $5.99 billion from $1.60 billion in last year’s third quarter. Revenues from Equities also increased to $2.78 billion from $1.56 billion. Another unit of the bank principal investments which includes the firm’s stakes in other companies registered a profit of $1.26 billion as against loss of $453 million last year. However it is not all rosy yet for Goldman. There was a 31% drop in investment-banking revenue to $899 million from $1.29 billion in the third quarter of last year. Bank officials have attributed this mainly to a decline in debt underwriting.

In the current scenario of economic slowdown the firm is operating as if nothing is wrong. The firm particularly has come under criticism for its bonus amount. Compensation amounting to $5.35 billion in the third quarter made up around 43 percent of its revenue and is the bank’s single biggest expense. The bank has earmarked $16.71 billion for bonuses which will be paid out in early 2010.The firm’s 31,700 employees are all set to earn an average of about $700,000 in 2009, a record for the 140-year-old firm.