Goldman hunts better returns from challenged markets business
In its global markets division, the bank faces its toughest task in its quest to deliver greater shareholder value.
What do you do with a problem like markets? It has been an increasingly thorny question for Goldman Sachs in recent years, and the bank's investor day on January 29 could not shy away from it. But its leaders faced up to the task with a raft of initiatives to improve returns and plenty of admissions of missteps along the way.
Over the last 15 months or so, the bank has been examining its global markets business, both internally and by seeking feedback from clients. What it was told, according to Goldman COO John Waldron, was that it had the best people – of course – but that it had made less investment in long-term relationships and was too siloed in its approach.
"We are working very hard to fix that," said Waldron. "But there is no silver bullet." The bank needed to pull multiple levers to improve its rankings, reduce its costs and increase its revenues.
But there was an echo of CFO Stephen Scherr's investor day commentary about the overall firm when Waldron cautioned that while measures to improve revenues were important, they were not the primary way in which the global markets division would improve returns.