January 7, 2020 / 12:33 PM / 7 months ago

UPDATE 2-Goldman Sachs shakes up business units in push for more transparency

(Recasts throughout, adds details on new changes)

By Abhishek Manikandan

Jan 7 (Reuters) - Goldman Sachs Group Inc will start reporting details on its consumer business for the first time and get rid of a volatile reporting line called investing and lending, in response to long-standing requests from analysts and investors.

The latest changes are part of a broader strategic overhaul under Chief Executive Officer David Solomon, who is looking to build a bigger consumer business to shield revenue from wild swings in financial markets that have pressured its trading arm.

Goldman unveiled a brand-new consumer unit that will include its Marcus online lending business, aligning its financial disclosures more closely with those of rivals JPMorgan Chase and Citigroup, which boast of much larger consumer businesses.

Goldman's move is expected to assuage concerns of investors and analysts who have long called for greater transparency across all of the bank's major businesses.

The new consumer and wealth management segment includes management and other fees related to managing assets, providing investing and wealth advisory services. (bit.ly/39IGu45)

"The new reporting structure appears more centered around its different client segments and should help drive increased accountability in how it executes on its relatively new strategy," Barclays analyst Jason Goldberg said.

"The biggest changes appears to be the elimination of 'Investing & Lending', an area that investors viewed as a low multiple business. Those revenue sources were divided up across its new business units," he added.

The other newly named units are investment banking, global markets - formerly known as institutional client services business - and asset management, which was previously called investment management.

Earlier in November, Reuters reported the bank may move away from its earlier goal of finding $5 billion in fresh annual revenue by 2020 to focus on new targets including a broad efficiency ratio and profitability measures.

Goldman is expected to unveil the new targets and metrics in January at its first-ever investor day on Jan. 29. It is expected to report fourth-quarter results on Jan. 15. (Reporting by Abhishek Manikandan in Bengaluru; Writing by Anirban Sen; Editing by Sriraj Kalluvila and Saumyadeb Chakrabarty)

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