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Goldman Sachs (GS, $313.85) is to merge its investment banking and trading operations into one unit. The combined business will sit alongside two other divisions: one of which will absorb the consumer banking arm, Marcus, into a new asset and wealth management arm. While the other will comprise transaction banking as well as the bank’s fintech platform portfolio, Apple and General Motors ventures, and recently acquired specialty lender GreenSky.
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The move is believed to be driven by a desire to boost fee-based business while reducing reliance on the more volatile investment banking and trading revenues. The bank saw trading revenues surge over 2020-21, delivering a strong performance, but slowed down significantly in Q4 2021 with a 13% drop in quarterly profit.
Why it matters
Commentators are questioning the rationale of the expected move, but say it could streamline the storied Wall Street firm. Experts were also puzzled about the future of Marcus, Goldman's digital consumer bank, for which Chief Executive Officer David Solomon had big ambitions to tap into Main Street customers.
