Exclusive: Goldman Sachs financial targets jeopardized as pandemic slows revamp

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Goldman Sachs Group Inc management is considering whether to scale back financial targets set earlier this year, as the coronavirus pandemic has hindered the bank's business model revamp, analysts and sources inside the bank told Reuters.

NEW YORK - Goldman Sachs Group Inc management is considering whether to scale back financial targets set earlier this year, as the coronavirus pandemic has hindered the bank’s business model revamp, analysts and sources inside the bank told Reuters.

Since then, the pandemic has slammed into the economy, crippling loan demand and causing widespread unemployment. It has also prevented Goldman bankers from drumming up business with new customers the way they could before coronavirus lockdowns. A spokesman for Goldman referred Reuters to executives’ prior statements but declined to comment further.

As it stands, Goldman pledged to produce a return on tangible common shareholders’ equity of more than 14% by 2023, compared with 10.6% in 2019. Analyst estimates for Goldman’s ROTE do not exceed 12% in the coming years, and the consensus for its efficiency ratio is 63.2% by 2024, suggesting a lack of confidence in the bank’s targets, UBS analyst Brennan Hawken noted in a recent report.

 

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