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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.

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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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Biden targets Trump voters in Pennsylvania with message of economic recovery, unity

Biden targets Trump voters in Pennsylvania with message of economic recovery, unity

Speaking to a small gathering of union members, Biden emphasized the differences between him and Trump — on the economy, their responses to the coronavirus pandemic and their ability to unite the country — and said that workers across the country had been “gutted by President Trump’s broken promises and reckless trade wars.”

“Folks, this is it. The election is here,” Biden said. “The choice couldn’t be more stark, the stakes couldn’t be higher.”

Biden accused Trump of being able only to “see the world from Park Avenue,” whereas he said his perspective was “from Scranton,” a comparison the former vice president has tried to drive home in recent weeks. He warned the crowd that Trump was seeking to destroy the Affordable Care Act, even as the coronavirus pandemic was increasing the need for access to health-care coverage, and spoke of the pandemic’s disproportionate impact on working-class people.

“America deserves a president who understands what people are going through,” Biden said. “You’re facing real challenges right now, and the last thing you need is a president who exacerbates them.”

Unlike in his previous campaign stop in Arizona, Biden made no direct mention of Trump’s coronavirus diagnosis or of his actions since then. Earlier Saturday, Trump had held his first public event since being hospitalized a week ago, a crowded gathering on the South Lawn of the White House where there was little social distancing among guests.

By contrast, Biden gave his speech in Erie in the parking lot outside of the training facility of the United Association Plumbers Local 27, which he had toured earlier. After he was introduced, Biden did a light jog up to the lectern wearing a disposable surgical mask, which he removed before speaking. Behind him was an array of pipes; in front of him, about

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BMW On Track to Meet 2020 Financial Targets, CFO Peter Says

BMW On Track to Meet 2020 Financial Targets, CFO Peter Says

(Bloomberg) — BMW AG is on track to meet its full-year targets after a recovery in auto sales led by China helped the manufacturer weather the coronavirus pandemic.



a car parked in front of a mirror posing for the camera: A BMW automobile i8 electric vehicle stands parked inside a Bayerische Motoren Werke AG showroom in Frankfurt, Germany, on Tuesday, Aug. 4, 2020. The German automaker said it is seeking to reduce CO2 output per car by at least a third by 2030, and track progress via raw material sourcing, production and road emissions.


© Photographer: Bloomberg/Bloomberg
A BMW automobile i8 electric vehicle stands parked inside a Bayerische Motoren Werke AG showroom in Frankfurt, Germany, on Tuesday, Aug. 4, 2020. The German automaker said it is seeking to reduce CO2 output per car by at least a third by 2030, and track progress via raw material sourcing, production and road emissions.

The German carmaker will meet both its full-year forecasts and the European Union-mandated CO2 targets this year, Chief Financial Officer Nicolas Peter said Thursday. He cited a boon from China, where car sales rose by a fifth in September from a year ago.

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“The third quarter was much better than the second quarter, but with different speeds in different markets and regions,” Peter said during a call with reporters.

BMW has projected an automotive Ebit margin of between 0% and 3% this year, and for sales to be significantly lower than last year after the pandemic shut down factories and dealerships. Deliveries of BMW-brand vehicles are down 11% this year through September, the company said earlier this week.

The automaker is also trying to ramp up sales of electric cars to meet emissions regulations in Europe that will get stricter in 2021. Peter said he sees the company complying with those rules this year and next year.

Read more: EV Sales Needed to Hit European CO2 Targets

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©2020 Bloomberg L.P.

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