Goldman Sachs pressed on strategy as new CEO confirmed

The Goldman Sachs stall on the floor of the New York Stock Exchange. (Reuters)

Goldman Sachs Group was pressed for details on new businesses after an uneven second-quarter performance, a likely preview of challenges incoming Chief Executive David Solomon will face as he leads the Wall Street bank’s overhaul.

The bank on Tuesday confirmed Solomon will take over from Lloyd Blankfein, who has held the position for 12 years, on Oct. 1, ending months of speculation. Solomon is tasked with executing a plan to boost revenue by entering new businesses and refashioning old ones.

The bank has pledged $5 billion more in annual revenue by growing its fledgling consumer bank, squeezing more from businesses like asset management and changing how it approaches trading.

Once considered the savviest Wall Street trading house, it has suffered because of tougher regulation since the financial crisis of 2007-2009 and low market volatility crimping revenues.

Goldman’s quarterly profit topped analyst estimates, but equities trading was flat and higher fixed-income trading followed a notably weak year-ago period.

Its shares, down 10.6 percent since the start of the year, were down 1.6 percent at midday.

In a research note, Wells Fargo analysts attributed the decline to questions about the bank’s shift in focus and noted Solomon’s absence from the earnings call.

Goldman Chief Financial Officer Martin Chavez told analysts on the call that Solomon’s promotion was “all part of the strategy.”

“You’ll see here the emphasis on more recurring fee-based revenue and you’ve seen that in the results. The emphasis on the growth plan, on driving revenue and earnings growth,” he said.

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Last Update: Wednesday, 20 May 2020 KSA 14:03 - GMT 11:03
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