Goldman Sachs has announced a broad shake-up of the divisions outside its trading and investment banking core, including naming current strategy head Stephanie Cohen as the first woman to lead a big business at the Wall Street powerhouse.
The reshuffle matches the bank’s management to a new reporting structure announced at Goldman’s investor day in January, when David Solomon, chief executive, laid out his plan for the next era of his 150-year-old company following years of poor returns.
The structure unites Goldman’s consumer and wealth management businesses, which will be jointly run by Ms Cohen and Tucker York, the bank’s current wealth management head, and puts its asset management unit and merchant bank into the same division.
The result is a clean separation between consumer and institutional businesses.
The appointment of a woman in a key leadership position is significant for Goldman, which has styled itself as a strong proponent of gender diversity but has thus far had men running all of its big revenue producing divisions.
The consumer business, meanwhile, is crucial to Mr Solomon’s efforts to remake Goldman in the post-crisis era, where trading, the bank’s traditional strength, is less profitable and has fallen out of favour with investors due to higher capital requirements.
Five years ago it created the online consumer bank Marcus, which has attracted $92bn in deposits, reducing the bank’s reliance on expensive wholesale funding. But the consumer and wealth segment still generated just 13 per cent of Goldman’s revenues in the first half of the year and challenges lie ahead as the pandemic has caused it to pull back on new lending and threatens a wave of defaults on existing loans.
“We see meaningful opportunities to further grow our franchise and advance financial opportunity for consumers,” Mr Solomon wrote in a memo announcing the management reshuffle. “Stephanie and Tucker will lead our efforts to grow our market share by leveraging all parts of the firm, including our relationships with corporate clients.”
Goldman’s newly united asset management and merchant banking divisions will be run by Eric Lane, who co-headed consumer and investment management in the old structure, and Julian Salisbury, who currently heads Goldman’s merchant bank.
Tim O’Neill, Mr Lane’s consumer and investment management co-head, has been moved to a senior advisory role in the bank’s executive office.
Goldman’s two big divisions — markets and investment banking — are structurally unchanged.
The announcement follows Monday’s news that Omer Ismail would head the consumer unit that includes Marcus, replacing Harit Talwar, who becomes chairman of that business. Mr Talwer had led Goldman’s fledgling efforts to enter the consumer business for five years.
Goldman’s shares are down 15 per cent year to date, less than many peer banks, as volatile markets have driven blockbuster results in its trading division.
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