Goldman Sachs is expanding its European wealth management business to offer loans to wealthy clients.

Goldman Sachs is expanding its European wealth management business to offer loans to wealthy clients, putting it deeper into the traditional private banking market.

The Wall Street-listed investment bank earlier in July launched a European lending unit for its private wealth management clients.

The new European lending business has a goal of building up a $5 billion loan book within the next three years, a report said, which was later confirmed to WealthBriefing. The fund is part of London-based Goldman Sachs International Bank and caters to Goldman’s roughly 1,700 wealthiest clients across Europe, the Middle East and Africa, it said. It will consist mainly of secured loans for objectives such as liquidity facilities, portfolio diversification, tax payments or luxury purchases.

In recent years, Goldman Sachs has pointed out to WealthBriefing that its wealth management business consists, fundamentally, of providing clients with the kind of long-term, high-end investment management service that is often only available to large institutional clients. Clients are typically ultra high net worth.

The Financial Times quoted Christopher French, Goldman Sachs’ head of private wealth, as saying: “Wealthy clients want leverage and they are good quality borrowers. The loan-to-value ratios are very conservative.”

But he added that the move, at least for the time being, was aimed mainly at existing clients rather than “a proposition to gain new clients”.