David Solomon, the bank’s CEO, wants to reduce the bank’s reliance on erratic trading and investment banking income by growing its fee-based operations and refocusing on its Marcus consumer banking division.
is preparing a significant reorganisation in which its investment banking and trading arms would be integrated, and its wealth business will take over consumer banking, according to a report published by the Wall Street Journal on Sunday.
According to the WSJ, which cited people familiar with the situation, the plans, which are anticipated to be announced in the coming days, call for Goldman to divide its three largest businesses into separate divisions.
CEO David Solomon wants to reduce the bank’s reliance on erratic trading and investment banking revenues by enhancing its fee-based businesses and shifting attention to its Marcus consumer banking unit. After making widespread employment cuts in September that are believed to have affected hundreds of bankers, the bank would undergo such an organisational makeover soon after.
On Tuesday, October 18, Goldman reports its third-quarter profits. Due to increases in trading of fixed-income securities and commodities, Goldman’s second-quarter earnings fell by 48% yet exceeded expectations. Last Friday, third-quarter results from rivals JPMorgan, Citi, and Morgan Stanley were all released.
The bank, like its Wall Street competitors, is anticipated to report a steep decline in third-quarter net profit as investment banking revenue was severely hit by a decline in dealmaking. Refinitiv’s compilation of analyst predictions for Goldman predicts a net profit of $2.77 billion for the third quarter, down from $5.38 billion in the same period last year.
The consumer banking unit, a new venture that was introduced in 2016 but is still having trouble gaining popularity, would also reportedly be merged with asset and wealth management as part of the restructuring. Marcus has experienced several delays and is reportedly losing money.
It has yet to introduce a checking account, which it previously stated will be introduced this year. By the end of 2024, Solomon has previously predicted that the company will bring in more than $4 billion. According to the bank, the consumer business serves more than 14 million customers and has over $100 billion in deposits with over $16 billion in card and loan balances.