Goldman Sachs plans major reorganisation

Goldman Sachs is planning to fold its crown jewel trading and investment banking business into one unit as it shrinks from four to three divisions.

The Wall Street bank is planning a major reorganisation that would see it merge its asset and wealth management divisions and shift part of its money-losing consumer business into a newly formed unit, according to people familiar with the matter.

The combined asset and wealth division will include its online retail bank Marcus and be led by Marc Nachmann, at present the co-head of Goldman’s trading division.

Other parts of Goldman’s retail banking business, such as its Apple credit card partnership and online loans provider GreenSky which it acquired last year, will form a new division along with transaction banking, which helps companies move their money around and had previously been part of Goldman’s investment bank.

Goldman’s push into retail banking started in 2016 and has come under scrutiny from investors and internally following years of losses and escalating costs.

The new structure, which was first reported by the Wall Street Journal, could be announced as soon as Tuesday when Goldman reports third-quarter earnings.

The move comes as chief executive David Solomon struggles to close a stock market valuation gap with rival banks which has widened since he took the reins in 2018.

The market has cheered Morgan Stanley’s expansion into more stable fee-generating businesses such as wealth management, as opposed to volatile investment banking and trading activities.

Solomon has tried to expand into more predictable businesses such as asset management and transaction banking, and offset the volatility of the trading business, but has so far struggled to meaningfully change Goldman’s revenue mix away from investment banking.

The unified trading and banking division will bring Goldman in line with peers Morgan Stanley and JPMorgan Chase which have a similar structure.