Goldman Sachs is building an in-house private
bank to cater for its wealthy global customer base, as it released
figures showing its net profits more than halved in the second
quarter.
The Wall Street Journal reported on
17 July that the New York securities firm is increasing its private
banking activities and that the new unit will also lend more
directly to companies.
Bank executives have set a goal of $100bn in
loans, up from $12 billion at the end of March, the WSJ said.
Investment bank suffers
Due to new regulations, market turmoil and a
slow global economy Goldman Sachs has seen its traditional trading
and investment banking operations suffer.
The WSJ reported that the new bank is part of
its new, more cautious strategy to reshape its business.
To date, Goldman Sachs’s banking unit has
about $100bn in assets, or nearly 10% of Goldman’s total assets,
according to the WSJ.
Q2 profit slump
Goldman’s plans to boost its in-house private
bank were reported before the firm released its second quarter
figures showing its net profits more than halved in the past three
months.
Net income fell to $962m in the three months
to 30 June, down from $2.1bn in the first quarter.
Goldman Sachs blamed a drop in its investment
banking activities and deteriorating market conditions.
Goldman Sachs had assets under management of
$227bn as of 31 December 2011.
The US bank had not responded to a request for
comment at the time this story was posted.
