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Goldman Sachs revamp highlights wealth, consumer businesses

Jim McNamara joined Goldman Sachs in 1998, became managing director in 2000 and made partner in 2006.

Goldman Sachs revamped the way it breaks down results by division to highlight growth in its consumer business and get more credit from investors.

The firm created a consumer and wealth management unit that houses the Marcus online lending business and Goldman’s credit card venture with Apple. The company eliminated its investing and lending segment, a division investors often discounted because profits were difficult to predict.

The moves, outlined in a filing Tuesday, will spread the interest income Goldman receives from its lending efforts across all four of the new segments and make the firm’s divisions more comparable to its competitors. The changes may help with the bank’s effort to show off areas of growth as a long slump in its biggest business — trading — has weighed on shares.

Equity investments made with the firm’s own capital will be housed in a renamed asset management unit. The bank, which is hosting its first investor day on Jan. 29, has said it’s looking to move away from taking stakes with its own money and is trying to raise more client funds.

While these 20 dizzying changes will throw some for a loop, financial advisors and their clients grow more powerful each year.
December 18

“The presentation is more consistent with the way the business is run and the way it is presented by peers,” Mike Mayo, an analyst at Wells Fargo, said in a note. “While we view management as focused more on long-term value, this attitude shows that management is aware of an underperforming stock price.”

The stock jumped 38% last year, but it still trades at a lower multiple of its book value than most major U.S. banks.

Bloomberg News