Here's something you don't see every day: Goldman Sachs reported a Q3 loss of $428mn thanks to problems in its private equity portfolio and struggles in the global economy. It's only the second time Goldman has posted a quarterly loss since going public in 1999. The bank reported a $1.7bn profit in Q3 2010. The firm got whacked by negative net revenue of $2.48bn in the investing and lending group. The results included a $1.05bn hit on its private equity investment in the Industrial and Commercial Bank of China, a strategic investment made in 2006; I.C.B.C. stock fell roughly 35%in the quarter. The firm also booked net losses of roughly $1bn related to equities, on top of net losses $907bn in debt positions. Net revenue in the business that trades bonds, currencies and commodities was $1.73bn, down 36% from year-ago levels. This division accounted for roughly 48% of all revenue generated by the firm in the third quarter. Net revenue from equities trading and commissions was up 18%, to $2.3bn . The firm attributed this rise to higher commissions that resulted from increased activity in the quarter. Goldman’s return on equity, a crucial measure of profitability, fell to 3.7% annualized for the nine months, down from 10.3% in the year ago period. Five years ago, it was 32.8%. The quarterly loss is likely to translate into smaller bonuses for Goldman’s roughly 30,000 employees. So far this year, the firm set aside $10.01bn to pay compensation and benefits, down 24% for the same period in 2010. While Goldman has set less money aside to pay employees, the ratio of compensation and benefits to net revenue in the third quarter was 44%, in line with previous accruals. Goldman, like most Wall Street firms, has been cutting staff in recent months. At the end of the third quarter, it had 34,200 employees, down 1,300 from just three months ago. In the wake of the downturn, Goldman has been working to reduce expenses. The firm’s third-quarter operating expenses including compensation were $4.32bn, 29%lower than the third quarter of 2010. [Dealbook, 10/18/11]