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Goldman details $5 billion revenue growth plan amid investor questions


By Olivia Oran

- Group Inc on Tuesday unveiled a plan that could add as much as $5 billion in annually, as the seeks to reassure investors after two poor trading quarters in a row.

The initiative, which is not dependent on an overall improvement in the market environment, can be realized in the next three years and could contribute up to $2.5 billion in pre-tax earnings, president Harvey Schwartz said during a Barclays Group PLC financials conference in New York.

The plans represent a marked shift for a firm that historically has given its shareholders little information about how it makes its money.

But investor frustration particularly around the firm's fixed income trading performance has tested Goldman's time-tested "black box" strategy, reported in August.

"These are things that generally might give you a sense of what's happening under the hood at Sachs," Schwartz said.Schwartz devoted significant time detailing priorities within fixed income, which during the second quarter reported a 40 percent drop in

These opportunities include courting a greater number of asset managers and to trade with the firm; expanding its footprint with corporate clients particularly in commodities and currencies; lending more to clients; and hiring more trading talent. These plans could add $1 billion in to each year, Schwartz said.

previously has said it is trying to reduce its reliance on hedge fund clients and to encourage bankers and traders to work together to boost profit with the trading division.

also is focused on growing its lending portfolio across the firm, including its Marcus consumer loan and deposit platform, its corporate clients and its private wealth management clients.

Some analysts expressed hesitation that will be able to execute on these plans.

"Goldman's strategy is focused on penetrating new markets or client segments outside of the company's traditional strengths so we are somewhat skeptical of the management's ability to hit these targets," KBW analyst Brian Kleinhanzl wrote in a note.

(Reporting by Olivia Oran in New York; Editing by Chizu Nomiyama and Bill Trott)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, September 12 2017. 19:33 IST