© Reuters. FILE PHOTO: The logo for Goldman Sachs is seen on the trading floor at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly/File Photo
By Saeed Azhar and Lananh Nguyen
NEW YORK (Reuters) -Goldman Sachs Group Inc would aim to grow fees from asset and wealth management and try to make profits from a newly-created unit, the investment bank said on Tuesday, laying out its key priorities at the start of its second investor day.
The bank restated a longer-term target for return on tangible equity of 15% to 17% “through the cycle” and said it had “significant” room to grow market share for wealth management in the United States and globally.
The investment bank will outline the path to profit for its Platform Solutions unit, which houses Goldman’s transaction banking, credit card and financial technology businesses, it said.
Shareholders are awaiting more detail about its plans for Platform Solutions, formed after Goldman lost billions on its foray into consumer banking and reined in its ambitions. The pullback on costs could help the bank to meet its efficiency targets.
Chief Executive David Solomon’s performance and his plans for growth will also be scrutinized by investors and analysts.
Observers will focus on his plans to decrease Goldman’s reliance on trading and investment banking, which can be whipsawed by market volatility.
The bank has said it plans to slim down some alternative investments that weighed on profits last year.
“We will identify a $30 billion historical principal investment portfolio earmarked for sell-down and lay out a plan to reduce this portfolio to zero over the medium term,” the bank said.
“Earnings could continue to be subdued for the next year or more, as the economic environment remains uncertain, which should pressure investment banking and asset management revenue,” said Michael Wong, an analyst at Morningstar Inc.
After a solid performance in recent years, Goldman’s markets division could weaken in the short-to-medium term because “trading is a wild card,” he said.