ALBANY (CN) – A decade after the 2008 financial crisis, Wall Street profits for the first half of 2018 are the highest in a decade, a report released Monday by the New York state comptroller finds.
Profits totaled more than $13.7 billion in the last two quarters, Comptroller Thomas DiNapoli reported, noting that the figures are up 11 percent from 2017.
“Ten years after Lehman Brothers' collapse it is clear that Wall St. does not need to return to the days of excessive risk-taking to enjoy rising profits,” DiNapoli said in a statement.
The report notes that last year’s pretax profits of $24.5 billion, adjusted for inflation, also broken a record set in 2012.
“Wall Street has profited every year since the end of the recession in 2009, and compensation last year reached its highest point since the financial crisis,” DiNapoli added. “The momentum from last year's dramatic rise in profits has carried into 2018 and the industry is on track for another good year absent a setback later in the year.”
The report also notes that there are about 120 broker-dealer operations of New York Stock Exchange member firms, down from more than 200 before the financial crisis.
According to the report, New York state had more securities industry jobs (197,300 in 2017) than any other state in the country, more than twice as many as second-ranked California and nearly triple those of third-ranked Texas.
The field, which has the highest average salary of any industry in New York City, accounted for fifth of all private-sector wages in 2017, even though it accounted for less than 5 percent of employment.
The report found that the average salary, including bonuses, in New York City's securities industry increased by 13 percent to $422,500 in 2017, the highest since the financial crisis of 2008 and the third-highest on record after adjusting for inflation.
Adjusting for inflation, bonuses, which accounted for an estimated 40 percent of securities industry wages in 2017 are also at the highest in a decade; the average bonus paid to securities industry employees in New York City increased by 17 percent in 2017 to $184,220.
The Comptroller’s Office reported that bonuses are likely to increase in 2018 for the third consecutive year based on compensation and profit trends in the first half, although it is too early to predict with certainty.
The securities industry added 10,600 jobs in the city between 2010 and 2017, bringing employment to 176,900; despite those gains, the industry is still 6 percent smaller than before the financial crisis.
The securities industry accounted for 18 percent of New York’s tax collections in state’s fiscal year 2017-18.
Over the weekend, President Donald Trump boasted about record-breaking financial figures ahead of the midterm elections. “Best economic numbers in decades,” he tweeted. “If the Democrats take control, kiss your newfound wealth goodbye!”
DiNapoli’s report comes on the heels meanwhile of a federal complaint against his office by Maria Vullo, superintendent of New York’s Department of Financial Services. Vullo wants a court to block what she calls DiNapoli’s "ill-conceived" decision to let financial-technology companies, or FinTech, apply for special national banking charters, claiming the move threatens to destabilize financial markets that are more effectively regulated by the state.
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