The Wall Street Journal (WSJ) reported on the 14th (local time) that Goldman Sachs, which has withdrawn from the retail finance business, is increasing loans to wealthy people.
Goldman Sachs is expanding loans to individual asset owners who hold more than $60 million in bank deposits on average. The WSJ also said that the trading department’s lending business to institutional customers, including hedge funds, who want to take out loans for stock investment, is expected to generate the highest profit in about three years.
In fact, Goldman Sachs’ loans to wealthy customers, including wealthy individuals, rose 12% year-on-year from January to September last year. In addition, Goldman Sachs’ loan and loan agreement balance, excluding retail finance, totaled $327.5 billion as of the end of the third quarter of last year, up about a third from the same period in 2020.
The WSJ explained that Goldman Sachs’ strategy is part of its efforts to diversify its revenue flow. Retail finance was included in this, but after losing billions of dollars, it is finally withdrawing. In Goldman Sachs’ earnings announcement scheduled for the 16th, the company is expected to emphasize growth in the sector excluding retail finance.
In recent weeks, Goldman Sachs has also launched new loan products targeting asset-value customers in the asset management sector. These customers can receive loans based on their investment assets in specific private equity funds.
The loan business is critical to Goldman Sachs’ plan to increase revenue in the asset management sector, and CEO David Solomon expects it to be a big source of revenue, WSJ reported.
