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.
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.