The Wall Street Journal reports that Goldman Sachs is planning to share more information about their different business units. The new financial disclosures will finally give investors insight into both their lending practices and their trading business, areas where the bank has previously shared very little.
Currently, shares of competing banks like JPMorgan Chase and Bank of America are valued much higher. and the Goldman Sachs CEO believes their stock is significantly undervalued. The hope is that the increased transparency will help their stock which currently trades at levels around their 2007 stock price. From the WSJ:
Mr. Solomon and his deputies, including finance chief Stephen Scherr, are betting that more openness will help in the meantime. For all of Goldman’s changes since the financial crisis—building a consumer bank, reining in freewheeling traders, lowering its funding costs—investors still view the firm as more prone to market swings than rivals and less willing to explain its results.
The build out of their consumer bank and their Marcus brand has been one of the biggest strategic changes for the firm. Marcus is now one of the leading digital banks in the US and they have also recently moved aggressively into the UK with plans to expand elsewhere in Europe.
One of the big changes is breaking out their investing and lending segment which previously included various loans and bets that the bank had made. Loans to companies will now be reported as well as loans to hedge funds, but it remains to be seen whether we will learn more about their personal loan business. Investors will also be able to see revenue from wealth management which is noteworthy given the bank has recently opened up to serving a younger demographic who aren’t necessarily wealthy.