NEW YORK ( TheStreet) -- Even when Goldman Sachs ( GS) loses, it wins.

Goldman undercut rival investment banks by offering to charge a puny underwriting fee for General Motors ( GM) upcoming initial public offering, according to a report by Bloomberg News early Monday. A Goldman spokeswoman declined to comment.

Goldman will not be the lead underwriter on the deal, expected to raise $12 billion to $16 billion, which would make it the second-largest offering in U.S. history. However, Goldman knew they would not get the top spot from the beginning, the Bloomberg report states, and offered to charge just 0.75%, well below the 2% proposed by Bank of America ( BAC) and other banks that were pitching the U.S. Treasury for the GM business.

The result is that the Treasury imposed that low fee on all the banks expected to be involved in the deal, including lead underwriters JPMorgan Chase ( JPM) and Morgan Stanley ( MS), according to the report. A call to Ron Bloom, a U.S. Treasury Department official charged with overseeing the government's investment in GM, was not returned.

The 0.75% fee means that if the deal raises $12 billion, the banks will split $90 million, as opposed to the $320 million they would have split if they'd all gotten to charge 2%. Either number, especially if its divided five ways among the various underwriters, doesn't amount to much money for a giant global financial institution.

Banks win the business so they can build relationships and be in the thick of the information flow. Properly exploited, the chance to be an underwriter on a big IPO like GM ought to be worth far more than the puny underwriting fee would suggest.

Goldman has arguably been the best at exploiting such opportunities over the past decade, but under the new era of supposedly tighter regulation, it isn't yet clear if the game has changed. In the past, Goldman's proprietary traders might have gleaned some insights into what was happening at GM, even though technically things weren't really supposed to work that way.

Now Goldman isn't even supposed to be doing much proprietary trading. Still, it's hard to see how the GM deal isn't a political and competitive win for Goldman. Whether the firm can turn that win into the big profits Goldman investors have come to expect remains to be seen.

-- Written by Dan Freed in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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