Goldman Sachs plans major reorganization

Goldman Sachs plans to consolidate its crown jewel trading and investment banking businesses into a single unit as it grows from four to three divisions.

The Wall Street bank is planning a major reorganization that would see it merge its asset and wealth management divisions and move some of its losing consumer business into a new unit, according to people familiar with the matter.

The combined assets and wealth division will include its Marcus online retail bank and will be led by Marc Nachmann, currently co-head of Goldman’s business division.

Other parts of Goldman’s retail banking business, such as its Apple credit card partnership and online lending provider GreenSky which it acquired last year, will form a new division with the bank of transactions, which helps companies move their money and was formerly part of Goldman. Investment bank.

Goldman’s push into retail banking began in 2016 and has come under intense scrutiny from investors and internally after years of losses and rising costs.

The new structure, which was first reported by The Wall Street Journal, could be announced as early as Tuesday when Goldman reports third-quarter results.

The move comes as chief executive David Solomon struggles to close a market valuation gap with rival banks that has widened since he took the reins in 2018.

The market encouraged Morgan Stanley’s expansion into more stable fee-earning businesses such as wealth management, as opposed to volatile investment banking and trading businesses.

Solomon has attempted to expand into more predictable businesses such as asset management and transaction banking, and offset volatility in trading activities, but has so far struggled to significantly shift the mix of Goldman’s income by moving it away from investment banking.

The unified trading and banking division will align Goldman with peers Morgan Stanley and JPMorgan Chase which have a similar structure.

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