Goldman Sachs GS plans the restructuring of its business lines in commensurate with the strategy which was unveiled earlier this January, with reshuffling of the bank’s business units and a number of changes in management. Per the strategic plan, the merchant banking and asset management businesses will likely be merged into a single segment. Eric Lane and Julian Salisbury will head the new unit.
Notably, through the latest move, Goldman expects more client funds to flow in for investment instead of betting the bank’s money. A new unit — Consumer & Wealth Management — was also created early this year, which will be co-led by Stephanie Cohen, one of the most senior female bankers of Goldman and Tucker York, beginning 2021. This move will, remarkably, include Cohen — the only woman — among the top dozen executives of the bank who take major decisions or run its money-making units.
The restructuring will boost the bank’s transparency and drive accountability for moving the business forward. Markedly, the bank’s move reflects its ongoing commitment for organizing the firm in a client-centric way. Further, the changes reflect chief executive officer David Solomon's efforts in making Goldman at par with other investment banks, including JPMorgan JPM and Citigroup C, which cater consumer businesses on a large scale and comparatively provide more information to investors.
Among others, Omer Ismail will become the new head of the bank’s Marcus consumer bank, replacing Harit Talwar. Notably, Talwar will be appointed as chairman of its consumer business. Russ Hutchinson, currently heading financial institutions M&A in the Americas, will be appointed as chief strategy officer.
Bottom Line
CEO David Solomon is expediting efforts to revamp the bank in a bid to focus more on stable operations. We believe the execution of the restructuring moves will support the company’s prospects.
Goldman currently carries a Zacks Rank #3 (Hold). Shares of the company have gained 27.3% in the past six months compared with 25.8% growth registered by the industry. This is way below other big investment banks, including Morgan Stanley MS. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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