The Securities and Exchange Commission asked Goldman Sachs Group Inc. (GS:US) to disclose how much products such as mortgages and commodities contribute to its trading revenue to give investors more clarity on how the firm makes most of its money.
Goldman Sachs said it will give “additional qualitative disclosure” of the revenue by product types, according to correspondence with the regulators released today about the New York-based firm’s 2012 annual filing. The SEC indicated it was satisfied with that response.
Goldman Sachs’s institutional client services division, which includes stock and fixed-income trading, generated 53 percent of the firm’s revenue last year. Like most of its competitors, Goldman Sachs only provides a single revenue line for fixed-income trading, which includes products ranging from Treasuries to distress bonds and uranium.
The SEC noted that the firm produced a third of its revenue from market-making and made the request “in light of its significance.” Goldman Sachs said that its quarterly filings includes a breakdown of some revenue by product.
The data include market-making and “other principal transactions” revenue reported through the firm’s investing and lending unit, which houses the company’s own investments. It excludes trading commissions and net interest income.
Goldman Sachs generated $4.37 billion from interest rates, $5.51 billion from credit and $5.8 billion from equities, according to the data. It lost $1 billion from currencies, while producing $575 million from commodities and $1.97 billion from “other.” The breakdown doesn’t reflect how the firm runs its business, Goldman Sachs said in the filing.
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