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Opinion

Goldman’s Lemkau: The cat who got the cream

The investment banking co-head is proud of his RoE, while the securities team seems subdued about the task ahead.

Goldman Sachs admitted to problems in its global markets unit during the bank’s inaugural investor day on Wednesday. This left investment banking co-head Gregg Lemkau looking the happiest presenter on stage.

Global markets had a return on equity (RoE) of just 7% last year at Goldman, which was a drag on overall performance, given that the division still consumes just over half of all capital – or $40 billion of the $79 billion total for 2019.

The bank was clearly conflicted about how to present the prospects for the trading operation that remains its biggest unit, and will be key to performance in the years before diversification efforts in consumer and transaction banking make a meaningful impact.

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