Friday , May 24 2019

Citi, Goldman assure revamping units that dragged down results

Bloomberg

Citigroup Inc. and Goldman Sachs Group Inc. both delivered better-than-expected earnings. Instead of celebrating, executives were assuring investors they’ll make more progress on revamping units that are dragging down results.
Growth stalled at Citigroup’s consumer unit, so executives pointed to green shoots in a digital bank effort. Goldman Sachs had the biggest first-quarter trading decline among banks that have reported so far, and its executives highlighted efforts to re-focus the unit on more electronic trades that
require less capital.
Lower tax rates and a pair of surprise revenue jumps — bond trading for Citigroup and investment banking for Goldman Sachs — drove the profit beats. But the banks’ results did little to assuage concerns about businesses that have been under the spotlight over the past year.
There were signs analysts are getting restless. Asked on a conference call what was taking so long with a strategic review, Goldman Chief Executive Officer David Solomon said the firm does have a sense of urgency, but needs to make sure the review is handled properly.
“We’re trying to balance the fact that you all want more, quicker,” said Solomon, who took over as CEO in October. “We understand that, but we’re going to make sure we do it in the highest-quality way we can.” The bank said results of the review probably wouldn’t be ready until the first quarter of next year.

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