For the first time in three years, Goodbody Stockbrokers is predicted to report a yearly profit, as informed by insiders. This is after the company managed to reduce its pretax deficit by over 50% to €7 million in 2023. Their total earnings saw an upturn of 12.4% to €73.3 million, despite a slump in commission and fee income in their wealth management and investment banking branches. This was according to the latest financial disclosure by the firm to the Companies Registration Office.
The boost in revenue predominantly came from various other sources, like commissions from predetermined product transactions and interest margins generated from stashing clients’ funds on deposit. These surged by 81%, amounting to €18.1 million. Client funds of around €3.7 billion were held in deposit in bank accounts operated by Goodbody for them by the close of the previous year. Irish banks had at that time been offering as much as 3% on some products, after a succession of rate hikes by the central bank.
The income from trading securities that Goodbody held in their own records catapulted to €2.81 million, up from €747,000 recorded in 2023. Still, operational costs escalated nearly 5% to €83.1 million, spurred by payroll costs as the average workforce size rose to 375 from 354 over the preceding year.
Goodbody, purchased by AIB in September 2021 for €138 million, and presently managed by CEO Martin Tormey, axed 20 jobs in the investment banking department last autumn. This was amidst global sluggishness in deal negotiations and fundraising, and an anticipated hastening of major corporations departing the Irish stock market.
However, the acquisition of Clearstream Solutions, a consultant for environmental, social, and governance matters with 15 staff members, helped balance the job cuts. More so, certain AIB employees migrated to Goodbody alongside an equity capital division and the company remained in hiring mode in its wealth management sector.
The recently released financial reports indicate that Goodbody purchased a 27 per cent initial interest in Clearstream at a cost of €2.98 million. The brokerage firm has the opportunity to acquire the remaining shares in 2026.
A substantial sum of €4.22 million was acquired by Goodbody through the divestment of its fund administration division to the Netherlands-based professional service provider, TMF Group, according to the same reports.
Insiders predict that Goodbody is poised to see profitability again this year, despite a substantial €1.23 million fine levied by the Central Bank in February. The fine came as a penalty for the firm’s inability to establish an efficacious system to scrutinise and detect dubious trading activities.
An enforcement procedure instigated by the Central Bank, first mentioned in Goodbody’s 2021 report, concluded that the firm had infringed European Union market abuse rules (MAR) over a stretch from July 2016 until January 2022. The investigation identified that Goodbody didn’t establish a robust system to oversee, identify, and disclose suspicious trading activities related to market abuse throughout the 5½-year timeframe. It was not found by the regulator that Goodbody failed to detect any doubtful transactions within that period.