Browsed by
Tag: Sachs

Report: Goldman Sachs in Danger of Missing 2020 Financial Targets

Report: Goldman Sachs in Danger of Missing 2020 Financial Targets

Goldman Sachs (NYSE:GS) might trim the fiscal goals it set for itself earlier this year due to weaker-than-expected results, according to an article published Monday by Reuters.

Citing “analysts and sources inside the bank,” the article said that the company’s ambitions to pivot its focus toward higher revenue-generating segments have been limited by the coronavirus pandemic. In the company’s Investor Day held in January, it outlined plans to lift its return on equity and reduce expenses.

The strategy sought to ramp up business both in lucrative fields in which it has experience and in relatively new corners of its operations. In the former category are activities such as wealth management, while the latter consists of businesses such as consumer loans.

A person cutting a set of U.S. currency bills.

Image source: Getty Images.

According to the article’s sources, the economic strain caused by the outbreak has severely limited the scope for its sales force to win new business. As seen at other banks and financial services companies active in lending, demand for fresh credit has weakened substantially.

Goldman has not officially commented on the article; instead, a spokesman referred to its previous announcements on its latest business strategy. Reuters’ sources did not speculate to what degree management might scale back the financial targets it set in January, or how the company might modify its strategy.

The speculation comes two days before Goldman is scheduled to release the results of its third quarter of fiscal 2020. These are to be delivered before market open on Wednesday. They will be followed immediately by a conference call to discuss them in greater detail.

On Monday, investors seemed unconcerned by the news. They traded the company’s stock up by nearly 3.2%, which comfortably exceeded the gains of the wider equities market on the day.

Source ARead the rest

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)

Read the rest
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

Read the rest
Former Goldman Sachs CEO Lloyd Blankfein says a wash of free money is creating ‘bubble elements,’ citing SPAC market

Former Goldman Sachs CEO Lloyd Blankfein says a wash of free money is creating ‘bubble elements,’ citing SPAC market



Lloyd Blankfein wearing a suit and tie: Brendan McDermid/Reuters


© Brendan McDermid/Reuters
Brendan McDermid/Reuters

  • Goldman Sachs’ former CEO Lloyd Blankfein told CNBC on Thursday that a “wash of free money is clearly creating bubble elements in the markets.” 
  • The banking titan blamed low interest rates for creating free money for large investors. 
  • Blankfein also cited speculation in the growing SPAC market: “Look at SPACs and how much money  is available on the basis of somebody’s reputation as opposed to a business plan.”

Former Goldman Sachs CEO Lloyd Blankfein told CNBC on Thursday that a “wash of free money” due to low interest rates is “clearly creating bubble elements in the markets.”

Loading...

Load Error

“Given that money is kind of free, it presumably is not being allocated in a disciplined way, and so there are bubble elements to this,” Blankfein said. “Look at the credit market — people are lending to what historically would have been weak credits for very little money.”

The banking titan also referred to the SPAC market as a sign that the market is taking on much speculation lately. In this year alone, about 110 blank-check firms led by notable investors like Chamath Palihapitiya and Bill Ackman have raised over $40 billion on public markets. That’s over $26 billion more than what last year’s SPACs raised.

Read more: Citi’s US equities chief warns of an ‘extreme peak’ in earnings revisions heading into the crucial reporting season — and explains why it makes stocks vulnerable to a pullback in the weeks ahead

“Look at SPACs and how much money  is available on the basis of somebody’s reputation as opposed to a business plan,” Blankfein said. 

The banking titan can be added to the growing list of investors voicing concerns about the speculative nature in markets. Last week, venture capitalist Bill Gurley said the stock market reminded

Read the rest
Goldman Sachs’ chief economist says Asia is ‘best positioned’ to stage an economic recovery from COVID-19

Goldman Sachs’ chief economist says Asia is ‘best positioned’ to stage an economic recovery from COVID-19

Goldman Sachs


  • Goldman Sachs’ chief Asia economist Andrew Tilton told CNBC’s “Street Signs Asia” he is “reasonably upbeat” on the economic recovery going into 2021. 
  • He said: “We think Asia’s really the best positioned of the major regions right now, just given the good control of the virus in most of the regions outside of India and some parts of Southeast Asia.”
  • He said purchasing managers indices were better in September, suggesting momentum in the industrial sector remained strong. 
  • He said a fiscal deal in the US between Republicans Democrats would bolster growth in Asia.
  • A blue wave scenario where a Democratic president takes control of both the House and Senate would bolster growth but may also “pull forward” the timing of the next Fed rate hike,” he said. 
  • Visit Business Insider’s homepage for more stories.

Asia is far better “positioned” to stage an economic recovery from the pandemic, Goldman Sachs’ chief Asia economist Andrew Tilton told CNBC’s “Street Signs Asia” Monday. 

Tilton said he is seeing “reasonable global momentum” going in the fourth quarter. 

“We think Asia’s really the best positioned of the major regions right now, just given the good control of the virus in most of the regions outside of India and some parts of Southeast Asia,” Tilton said. 

“We just had a round of purchasing managers indices which were almost all better month-on-month, suggesting that industrial sector momentum remains pretty good,” he added. 

Read more: A CIO who earned up to 90% per trade during the March crash offers his 2 best strategies for protecting against Trump-driven volatility – and says the president’s diagnosis will be the catalyst for a further sell-off

China’s huge manufacturing sector continued to recover in September, affirming the world’s second largest economy is recovering from the pandemic. 

Tilton

Read the rest