Goldman Sachs (NYSE:GS) is planning a major reorganization which will see its investment banking and trading arms combined, while its consumer banking will be absorbed by its wealth unit, the Wall Street Journal reported on Sunday.
The plans, which are expected to be announced within days, will see Goldman restructure its biggest businesses into three divisions, the WSJ reported, citing people familiar with the matter, as CEO David Solomon seeks to cut the bank's reliance on volatile trading and investment banking revenues by boosting its fee-based businesses and by shifting focus to its consumer banking unit Marcus.
Such an organizational overhaul of the bank would come shortly after it made global job cuts in September that are likely to have impacted hundreds of bankers.
Goldman releases its third-quarter earnings on Tuesday, October 18. Goldman reported a 48% slump in second-quarter profit, which beat forecasts due to gains in fixed-income and commodities trading. Rivals JPMorgan, Citi, and Morgan Stanley all reported third-quarter numbers last Friday.
READ: JPMorgan sees profit fall beat estimates after gains from higher interest rates
Like its Wall Street rivals, the bank is expected to report a sharp drop in third-quarter net profit as investment banking revenue was badly hurt by a slump in dealmaking.
Goldman is expected to deliver a net profit of $2.77 billion in the third quarter, according to analysts' forecasts compiled by Refinitiv, down from $5.38 billion a year earlier.
The reported restructuring will also see the merging of the consumer banking unit, a new initiative launched in 2016 but one which is still struggling to gain traction, with asset and wealth management. Marcus has suffered from some delays - it has yet to launch a checking account which it earlier indicated will be launched this year - and is reportedly burning cash.
Solomon has said in the past the business could generate a revenue of over $4 billion by end of 2024.
The consumer business serves more than 14 million customers and had more than $100 billion in deposits with over $16 billion in cards and loans balances, the bank has said.
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