Goldman Sachs making move into Main Street
GS Bank, Marcus brands aimed at consumers, not just the wealthy.
More homeowner, less hedge fund titan. Goldman Sachs, long known for its super-rich clients and well-connected executives, is starting to act a lot more like a neighborhood bank.
The most Wall Street of Wall Street firms really wants people to start thinking about it the next time they need to open a bank account or borrow money. It’s paying above-average rates on online savings accounts and offering that stodgiest of investments, good old-fashioned CDs. Personal loans are available through its Marcus brand, a friendlier reference to co-founder Marcus Goldman.
For a firm that never had a reason to advertise, Goldman now runs Marcus commercials with the casual tagline: “Debt happens.”
During most of its nearly 148year history, the main way to do business with Goldman was to be incredibly wealthy or a CEO at a major company. That’s changing.
“We want to grow a robust consumer banking business,” said Stephen Scherr, Goldman’s chief strategy officer and CEO of GS Bank.
Goldman’s retail banking business is less than two years old and tiny compared with the overall size of the firm. The company hasn’t yet even broken it out as a business line in its quarterly financial statements because of its size. And Goldman isn’t backing away from its traditional strengths: trading and advising.
Trading is inherently a volatile business, and a quiet market weighed on Goldman’s second-quarter results posted Tuesday. It earned $1.63 billion, or $3.95 a share, basically unchanged from a year earlier. The division that contains its trading desks had revenue of $3.05 billion, down 17 percent. Fixed income, currency and commodity trading revenue fell 40 percent, and Chief Financial Officer Martin Chavez said its commodities division had its worst quarter since the firm went public in 1999.
Goldman executives see the new consumer banking division as a way for the firm to expand into businesses it traditionally wasn’t involved in. But how well Goldman’s brand and image might appeal in the consumer business