Is Goldman Sachs On the Right Course?
The coronavirus crisis will force a lot of banks to rethink how they do business, certainly in the short term and likely in the long term, too. Goldman Sachs (NYSE: GS) has already been transitioning from its traditional investment banking roots into other areas, like consumer banking, to help mitigate potential adverse effects when certain segments of its business get hit by a crisis.
Chairman and CEO David Solomon provided some details on Goldman Sachs' efforts in a letter to shareholders in late March. In the letter, Solomon explained that the transition continues. Solomon outlined three strategic goals for the company over the next one to five years, which include plans to strengthen existing businesses while expanding into new markets. Is the bank on the right course? Let's take a look at the goals he set forth.
Goldman Sachs has four main lines of business with the largest being capital markets, which accounts for about 40% of its revenue. Here, the firm generates revenue from conducting trades for institutional clients. Next is the asset management business, which accounts for 25% of revenue, followed by investment banking, which generates about 21% of revenue. The fourth line of business is consumer and wealth management, which comes with its traditional banking operations with private wealth management. This area represents about 14% of revenue.
Source Fool.com
