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Goldman tracking ahead of $5 billion revenue goal by 2020


By Matt Scuffham

(Reuters) - Group Inc is tracking ahead of its goal to generate $5 billion in additional annual revenue by 2020 as growth initiatives bear fruit, its new chief said on Monday.

The revenue-boosting plan that management laid out last year has produced $2.5 billion so far in 2018, according to a presentation by at an industry event. He stopped short of increasing the target, but suggested Goldman could still do better.

"While we are meeting our objectives, these initiatives are not the limit of our ambition. Numerous business opportunities exist beyond the $5 billion (target)," said Scherr, who plans to provide a strategic update in the spring.

The presentation marks the first under a new management team at The is now led by a group of longtime dealmakers, including David Solomon, who started on Oct. 1, and Scherr, who gave the presentation on his first day as

Goldman, once considered the most savvy Wall Street trading houses, has suffered as tougher regulations make it harder to maintain profits at its trading businesses and as customer trends change since the 2007-2009 financial crisis.

Its new management wants to reshape the business. It is conducting a "front-to-back" review and will make a "clinical assessment" of whether each business is meeting its cost of capital, Scherr said, adding that the is not looking to shrink or exit businesses, but instead determine where to deploy capital for the best returns.

Scherr's presentation showed Goldman making headway on plans to lend more to consumers and big businesses. Its fledgling digital bank, Marcus, now has 2 million customers and it wants to grow that business's market share to eventually become a "one-stop shop for financial well-being," Scherr said.

The is also working to improve areas such as trading, and to squeeze more revenue from the where Solomon and his deputies built their careers. That business has generated $40 billion in deal volume from new customers since Goldman launched its strategy in 2016.

said in a report last week that it could take a significant amount of time for Goldman to truly change its earnings mix by growing organically rather than pursuing a substantial acquisition. Whichever path it pursues, he said, the bank is headed in the right direction.

"really wants to get bigger in growth businesses that investors and clients value most," Schorr said.

Goldman shares were down 0.9 percent at $227.71 in mid-morning trading.

(Reporting by Matt Scuffham; Writing by Lauren Tara LaCapra; Editing by and Susan Thomas)

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

First Published: Mon, November 05 2018. 22:26 IST