This is a very interesting article on Goldman Sachs (GS) development of a private bank to service wealthy clients with loans. Due to its status as a bank holding company Goldman Sachs has additional costs and regulations that it didn’t have before the financial crisis. It also provides new business opportunities and I believe this strategy of leveraging its high net worth clients and providing them with financing is an astute move. Goldman is targeting $100 billion of these types of loans that should provide a nice boost to revenues. Also Goldman is gathering more deposits securing extremely low cost funding for their operations. There are a lot of negatives for Goldman’s business model which is why the stock is so cheap but I think it’s smart for the company to begin really taking advantage of their status as a bank holding company, instead of treating it like it is a liability.
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