25 March 2019
David Solomon will take over as CEO of investment banking giant Goldman Sachs on October 1. Photo: Reuters
David Solomon will take over as CEO of investment banking giant Goldman Sachs on October 1. Photo: Reuters

Goldman pressed on strategy as Solomon confirmed as new CEO

Goldman Sachs Group was pressed for details on new businesses after an uneven second-quarter performance, as the US investment bank prepares for a leadership change, Reuters reports.

The Wall Street bank on Tuesday confirmed that David Solomon will take over as CEO from Lloyd Blankfein on October 1, ending months of speculation.

Solomon, who is currently the financial giant’s chief operating officer, is tasked with executing a plan to boost revenue by entering new businesses and refashioning old ones.

Goldman has pledged US$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.

CFO Martin Chavez told analysts on an earnings call that Solomon’s promotion was “all part of the strategy.”

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

The bank announced a 44 percent increase in second-quarter profit to US$2.3 billion, compared with US$1.6 billion a year ago.

Chavez was questioned on whether the bank was looking to improve disclosure and transparency for newer businesses, the report said.

The bank gave some details on its new consumer lending business, Marcus, for which it has big ambitions.

Chavez was asked why Marcus has yet to offer a banking app at a time when mobile banking is becoming the primary way customers transact.

Analysts also asked why Goldman’s compensation ratio had declined and for details on the bank’s investing and lending division, the report said. 

Goldman said bond trading revenue climbed 45 percent from an unusually weak year-ago quarter.

In equity trading, it lagged rivals JPMorgan Chase, Citigroup and Bank of America Corp, all of which reported gains, according to the report.

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