Goldman Sachs’ weakening business model pushing firm to consider merger: Gasparino
Sources tell FOX Business’ Charlie Gasparino Goldman Sachs is considering a merger and could possibly team up with Wells Fargo, PNC Bank, BlackRock, UBS or American Express.
The Dow Jones Industrial Average erased all its losses and ended Thursday firmly in the green following a Fox Business report that Goldman Sachs could be looking for a merger partner.
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Investment banking sources said speculation is growing that Goldman, under CEO David Solomon, will seek a deal with a major commercial bank in the coming months, which would be a radical shift for a firm that has valued its independence as a "white shoe" investment bank since its founding in 1869.
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Wells Fargo, PNC and U.S. Bancorp are the names on the shortlist.
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|PNC||PNC FINL SVC||97.84||+1.05||+1.08%|
|USB||U.S. BANCORP INC.||31.17||+1.72||+5.84%|
The developments, first reported by FOX Business's Charlie Gasparino, drove financial shares during Thursday's session helping boost the broader market.
Press officials for Goldman, Wells Fargo, PNC and U.S. Bancorp had no immediate comment.
But the Goldman Sachs that advised on mega-mergers and earned massive profits wager big bets in global markets is largely a thing of the past. Goldman's earnings have begun to trail its peers in recent years as post-financial crisis regulations squeezed profits from its once-dominant trading business, and while its other big money-maker, the investment banking business, has seen fees decline.
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The need for Goldman to grow, particularly as the coronavirus has largely shut down deal-making, has prompted a new round of speculation that the investment bank might merge with a big commercial bank, such as Wells Fargo, or even PNC Bank.
Goldman would be attractive to both players.
Wells Fargo, for example, is looking to rebuild its reputation after the fake-account scandal that cost the firm billions in fines and client business, and the job of its CEO, John Stumpf.