Goldman’s £3.77bn growth strategy

GOLDMAN SACHS Group on Tuesday unveiled a growth plan that could add as much as $5bn (£3.77bn) in revenue annually, as the bank seeks to reassure investors after two poor trading quarters in a row.

The growth initiative, which is not dependent on an overall improvement in the market environment, can be realised in the next three years and could contribute up to $2.5bn in pre-tax earnings, Goldman president Harvey Schwartz said during a Barclays Group PLC financials conference in New York.

The plans represent a marked shift for a firm that historically has given its shareholders little information about how it makes its money.

But investor frustration particularly around the firm’s fixed income trading performance has tested Goldman’s time-tested ‘black box’ strategy, it was reported.

“These are things that generally might give you a sense of what’s happening under the hood at Goldman Sachs,” Schwartz said. Schwartz devoted significant time detailing growth priorities within fixed income, which during the second quarter reported a 40 per cent drop in revenue.

These opportunities include courting a greater number of asset managers and banks to trade with the firm, expanding its footprint with corporate clients and hiring more trading talent.