People Moves

There's A New Sheriff At Goldman Sachs

Tom Burroughes Group Editor 18 July 2018

There's A New Sheriff At Goldman Sachs

The Wall Street firm, which operates in multiple regions and provides wealth management among its offerings, has a new CEO and chairman.

Goldman Sachs yesterday named David Solomon as its new chief executive, taking the helm from Lloyd Blankfein who steps down after a 12-year stint that saw him run the Wall Street firm during the worst financial crisis since the Great Depression.

Solomon, formerly co-chief operating officer and former co-head of the investment banking arm, was one of those touted as a potential successor when speculation rose in March that Blankfein was thinking of stepping down. As well as being the CEO, he also takes over as chairman from Blankfein.

The US-listed firm announced the new CEO as it also reported a 20 per cent year-on-year rise in net revenues for the second quarter of this year. 

Shortly after the announcement hit the newsfeeds yesterday, there was little change in share prices.

Blankfein departs the role on 30 September this year, retiring as chairman at the end of December. On his retirement, he becomes senior chairman. Solomon joins the board on 1 October.

While Goldman Sachs has been battered by the same financial storms that hit the rest of the banking world a decade ago, and has been through a period of soul-searching and recovery since, its leaders and their strategy are still talking points in modern financial markets. Many of its former senior figures, such as Robert Rubin, have gone on into government or related public roles (Rubin worked as US Treasury Secretary; and in the UK, a former senior Goldman Sachs economist, Gavyn Davies, became an economic advisor to government and took a senior role at the British Broadcasting Corporation).

Solomon became co-COO in 2016 and 10 years prior to that he was made global co-head of its investment bank. 

“David is the right person to lead Goldman Sachs. He has demonstrated a proven ability to build and grow businesses, identified creative ways to enhance our culture and has put clients at the centre of our strategy,” Blankfein said. 

Revenues and earnings up on year ago
The arrival of the new CEO took place against a backdrop of mostly positive results. The New York-based group reported net revenues of $9.40 billion, up by 19 per cent on a year ago, and net earnings of $2.57 billion, surging to 40 per cent on the year.

Net revenues in investment management came in at $1.84 billion in Q2, 20 per cent higher than the second quarter of 2017 and 4 per cent higher than the first quarter of 2018.

During the quarter, total assets under supervision (3) increased from $15 billion to $1.51 trillion. Long-term assets under supervision increased to $5 billion, due to net inflows of $8 billion spread across all asset classes. These net inflows were partially offset by net market depreciation of $3 billion, reflecting depreciation in fixed income assets, partially offset by appreciation in equity assets. Liquidity products increased $10 billion.

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