Goldman Builds Private Bank 
July 17, 2012 1 Comment
Goldman Sachs Group Inc. is building an in-house bank to lend money to wealthy people and companies, in a significant shift that underlines the harsh business climate facing Wall Street since the financial crisis.
The New York securities firm, known for its aggressive trading and big corporate deal-making, is ramping up its activities to become a private bank to serve wealthy customers around the world. The new unit will also lend more directly to corporations, some of whom already make investments and do business with Goldman. Executives have set a goal of $100 billion in loans, up from $12 billion at the end of March.
While Goldman says its financial investment in expanding its bank is a modest one, its ambitions represent a huge change of heart among the managers of the 144-year-old firm, including Chairman and Chief ExecutiveLloyd C. Blankfein.
Goldman has long been almost synonymous with Wall Street’s swashbuckling style and big bonuses, largely from businesses like trading and investment banking. Now, buffeted by a wave of new regulations, market turmoil and a sluggish global economy, revenue in these traditional powerhouses has fallen.