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Exclusive: Goldman Sachs financial targets jeopardized as pandemic slows revamp

Exclusive: Goldman Sachs financial targets jeopardized as pandemic slows revamp

NEW YORK (Reuters) – Goldman Sachs Group Inc management is considering whether to scale back financial targets set earlier this year, as the coronavirus pandemic has hindered the bank’s business model revamp, analysts and sources inside the bank told Reuters.

The ticker symbol and logo for Goldman Sachs is displayed on a screen on the floor at the New York Stock Exchange (NYSE) in New York, U.S., December 18, 2018. REUTERS/Brendan McDermid/File Photo

Goldman unveiled plans to boost returns on equity and cut costs during its first-ever investor day in January. To reach its goals, Goldman would squeeze more revenue from existing businesses like wealth management as well as relatively new ones like consumer lending, while launching additional corporate services like cash management.

Since then, the pandemic has slammed into the economy, crippling loan demand and causing widespread unemployment. It has also prevented Goldman bankers from drumming up business with new customers the way they could before coronavirus lockdowns.

Although Goldman’s trading revenue has soared thanks to market volatility, other initiatives have stalled.

“Unless there’s a silver bullet vaccine cure, it looks like Goldman will not hit its targets,” said Viola Risk Advisors bank analyst David Hendler. “It’s behind on wealth management and it’s behind on consumer.”

A spokesman for Goldman referred Reuters to executives’ prior statements but declined to comment further.

Goldman Sachs executives have stood by their targets, stressing that the path to achieving them in the coming years would not be “linear.” They are not expected to move the goalposts on Wednesday when the bank reports third-quarter results.

Instead, the bank may change targets in January, a year after they were set, said the sources, who were not authorized to speak publicly.

As it stands, Goldman pledged to produce a return on tangible common shareholders’ equity (ROTE)

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Exclusive: Goldman Sachs Financial Targets Jeopardized as Pandemic Slows Revamp | Investing News

Exclusive: Goldman Sachs Financial Targets Jeopardized as Pandemic Slows Revamp | Investing News

NEW YORK (Reuters) – Goldman Sachs Group Inc management is considering whether to scale back financial targets set earlier this year, as the coronavirus pandemic has hindered the bank’s business model revamp, analysts and sources inside the bank told Reuters.

Goldman unveiled plans to boost returns on equity and cut costs during its first-ever investor day in January. To reach its goals, Goldman would squeeze more revenue from existing businesses like wealth management as well as relatively new ones like consumer lending, while launching additional corporate services like cash management.

Since then, the pandemic has slammed into the economy, crippling loan demand and causing widespread unemployment. It has also prevented Goldman bankers from drumming up business with new customers the way they could before coronavirus lockdowns.

Although Goldman’s trading revenue has soared thanks to market volatility, other initiatives have stalled.

“Unless there’s a silver bullet vaccine cure, it looks like Goldman will not hit its targets,” said Viola Risk Advisors bank analyst David Hendler. “It’s behind on wealth management and it’s behind on consumer.”

A spokesman for Goldman referred Reuters to executives’ prior statements but declined to comment further.

Goldman Sachs executives have stood by their targets, stressing that the path to achieving them in the coming years would not be “linear.” They are not expected to move the goalposts on Wednesday when the bank reports third-quarter results.

Instead, the bank may change targets in January, a year after they were set, said the sources, who were not authorized to speak publicly.

As it stands, Goldman pledged to produce a return on tangible common shareholders’ equity (ROTE) of more than 14% by 2023, compared with 10.6% in 2019.

The bank also outlined plans to cut expenses by $1.3 billion over that time frame, producing an efficiency ratio of 60% compared

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Barca stadium revamp urgently needed due to financial hit, says vice-president

Barca stadium revamp urgently needed due to financial hit, says vice-president

By Richard Martin



a large auditorium: La Liga Santander - FC Barcelona v Sevilla


© Reuters/ALBERT GEA
La Liga Santander – FC Barcelona v Sevilla

BARCELONA (Reuters) – Barcelona must press on with plans to renovate Camp Nou in order to replenish revenues lost because of the COVID-19 pandemic, vice-president Jordi Moix told Reuters, adding that the 815-million-euro ($957 million) project will pay for itself.

The club announced a financing deal with Goldman Sachs on Monday to modernise their iconic but run down stadium and raise its capacity from 99,000 to 105,000.

Should the plan be approved by club members next year, building work can begin by June 2021 and will take around five years to complete.

The announcement came on the same day Barca released a grim set of financial figures, showing a loss of 97 million euros, while its net debt had more than doubled to 488 million euros.

Revenues were also down 19% from the previous year, by 135 million euros, as fans have been unable to attend matches due to coronavirus safety measures.

The club has also been harmed by the huge drop in tourism to the city due to the pandemic, affecting income from its museum, which usually receives 1.2 million visitors per year, and from merchandising.

According to Moix, the renovation of the stadium and surrounding area, known as Espai Barca, has been made more urgent by the pandemic.

“Espai Barca is needed more than ever because of COVID,” Moix told Reuters in a video interview.

“It’s a way to re-engine the economy of the city and the club and generate new revenues, but we have to put that investment in.”

The financing deal with Goldman Sachs ensures that the cost of the stadium will not interfere with the daily running of the club or affect its ability to attract and keep the best players

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