Goldman to Avoid Hard Profitability Targets at Investor Day: FT

(Bloomberg) -- Goldman Sachs Group Inc. will avoid setting strict profitability targets at its investor day scheduled for Jan. 29, the Financial Times reported Monday, citing people familiar with the plans who were not identified.

The New York-based investment bank will instead steer investors’ focus on its core Wall Street businesses, instead of its recent expansion into consumer banking, the newspaper said. Among its centerpiece announcements will be details of its ambitions to become an asset management powerhouse with the launch of a new merchant banking division with $135 billion of assets under management, according to the FT.

To create the merchant banking division, the bank will roll its investment management, asset management and lending arms into a single unit, the FT said.

A Goldman spokesperson couldn’t immediately comment on the report.

In November, Bloomberg reported that Goldman was leaning away from a target of finding $5 billion in extra revenue by next year, a goal that was set in 2017 as the Wall Street firm looked to expand a range of businesses separate from its traditional strengths in trading.

As well as boosting its consumer lending operations, the bank this year partnered with Apple Inc. on a new credit card. However, insiders at the bank believe that it could take a decade for the consumer operations to have a meaningful impact on earnings, the FT said.

Chief Executive Officer David Solomon inherited the revenue target from his predecessor Lloyd Blankfein after taking over as CEO in October 2018.

To contact the reporter on this story: Emily Cadman in Sydney at ecadman2@bloomberg.net

To contact the editors responsible for this story: Marcus Wright at mwright115@bloomberg.net, Linus Chua, James Ludden

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