Goldman defends spending as CEO Solomon says he is looking long-term
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BANKING

Goldman defends spending as CEO Solomon says he is looking long-term

A mixed third-quarter earnings result showed how Goldman Sachs’ investments in new ventures are dragging on returns, but CEO David Solomon argues they will pay off over time.

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Goldman Sachs CEO David Solomon



With a few earnings calls now under his belt, Goldman Sachs CEO David Solomon tends to rasp his way through them as if he’s George C Scott playing General Patton.

Reporting third-quarter earnings this week, he liked the fact that even though the firm’s investment banking revenues were down against a strong prior-year quarter, the bank was still number-one in equity underwriting and M&A.

Overall group revenues fell 6% year-on-year to $8.3 billion, but profits fell more sharply, by 22% to $2.4 billion as the bank’s spend on new areas dragged on returns.

At some point in January 2020, the bank will be laying out its strategy for the future in a full-blown investor day, a new experience for the firm.

However, in recent years Goldman has been busy trying to be a bit less like Goldman, building out its franchise into new consumer banking areas such as deposit accounts and now credit cards, as well as broadening its corporate appeal with a new transaction banking platform.

Solomon was pleased with the firm’s disciplined approach to building new scalable businesses, such as its Marcus deposit-taking platform and its Apple Card launch.