Investor Day
Strategic Roadmap and Goals - Goldman Sachs 2020 Investor Day
- Goldman Sachs outlines a three-part strategy of growing existing businesses, diversifying into new platforms, and operating more efficiently, with a three-year planning process designed to mature and become accretive to returns over the next three years.
- The firm targets a return on equity (ROE) of over 13% and a return on tangible equity (ROT) of over 14% as new initiatives scale, with a clear aspiration to generate at least mid-teens returns in the future.
- Specific financial and operational goals include an efficiency ratio of approximately 60% and a Common Equity Tier 1 (CET1) ratio maintained between 13% and 13.5% to allow for capital returns while staying above regulatory minimums.
- The firm has announced a target of $750 billion in financing, investing, and advisory activities across nine key growth themes, including clean energy and accessible health care.
- Strategic initiatives include modernizing the work environment, shifting culture toward long-term thinking, and simplifying client engagement through the "One Goldman Sachs" priority to deliver capabilities holistically.
- Growth plans involve extending the investment banking footprint, optimizing global markets, scaling asset management via partnerships, and expanding the ultra-high net worth wealth management platform in Europe and Asia.
- The firm intends to broaden wealth management offerings to the entire high net worth space, supported by corporate relationships and the acquisition of United Capital, while rolling out transaction banking services in the coming months.
- Goldman Sachs plans to build a digital consumer bank using scalable, disruptive technology, grow its alternative asset management business meaningfully, and apply a holistic approach to serve more clients with deep, broad, and consistent relationships.
- The firm views the early days of a financial services revolution driven by consumer technology as a major opportunity and intends to lead in sustainability, investing strategies, and governance models.
- Business expansion is conditioned on opportunities springing from client needs, capitalizing on competitive advantages, and remaining adjacent to existing businesses.
- To support these growth plans, the firm plans to evolve its credit risk management culture for consumer and financing businesses and stay focused on emerging cyber and geopolitical risks while adapting its risk profile.
- The firm aims to maintain talent for the next 150 years as its greatest asset, advance diversity in leadership, and encourage a risk management culture focused on learning, reflection, and self-improvement when issues arise.
- Management expects to update stakeholders on financial targets annually and views the current initiatives as requiring patience and fortitude as they plant seeds that will take time to mature.