David Solomon, chief executive officer of Goldman Sachs.
Patrick T. Fallon | Bloomberg | Getty Images
Goldman Sachs is reorganizing its businesses to more closely resemble Wall Street peers and give its nascent retail banking operations its own category.
The bank is now calling its four main segments global markets, investment banking, asset management and consumer & wealth management, Goldman said in a filing early Tuesday. Previously, the divisions were called institutional client services, investment banking, investment management, and investing and lending.
The changes, just before the bank’s fourth-quarter earnings report next week as well as its first-ever investor day later this month, should allow investors a cleaner look at how Goldman lines up with competitors. It could also showcase growth in Goldman’s digital retail banking operations, which had previously been buried in the investment management division.
It’s the latest step taken by CEO David Solomon to put his stamp on the company as it attempts to transition from a somewhat secretive Wall Street trading house to a bank with more diversified revenue streams.
The bank is dissolving its investing and lending division, a business that held public and private investment stakes that could result in earnings volatility in any given quarter — both to the upside and downside — and that some analysts had deemed a black box. For instance, in October, Goldman reported third-quarter profit that missed expectations, partly because it was stung by plunging holdings in Uber and Tradeweb held in the investing and lending segment.
CFO Stephen Scherr hinted at these changes in October during a conference call with analysts.
“We’ve been taking commentary and perspective from investors and from you in the context of where there’s been some frustration,” Scherr said. “I hear it loud and clear in the context of frustration with I&L, as an example, and so we’re going to guide ourselves in the direction of segments to meet some of what all of you have been asking for.”