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As
it gears up for the second investor day in its 154-year history,
the Wall Street powerhouse is expected to provide an update on
its medium-term target for return on tangible equity (ROTE) from
a current range of 15% to 17%. Its ROTE was 11% last year,
missing analyst estimates, as rising interest rates prompted a
sharp slowdown in dealmaking.
Investors are awaiting a roadmap to profits for the bank's
fintech unit, called Platform Solutions, formed after Goldman
lost billions on its foray into consumer banking and reined in
its ambitions. The pullback on costs could help the bank to meet
its efficiency targets.
Solomon's performance, and his plans for growth, will be
scrutinized by investors and analysts. Observers will also focus
on the CEO's plans to decrease Goldman's reliance on trading and
investment banking, which can be whipsawed by market volatility.
The bank has said it plans to slim down some alternative
investments that weighed on profits last year.
"Earnings could continue to be subdued for the next year or
more, as the economic environment remains uncertain, which
should pressure investment banking and asset management
revenue," said Michael Wong, an analyst at Morningstar Inc.
After a solid performance in recent years, Goldman's markets
division could weaken in the short to medium term because
"trading is a wild card," he said.
(Reporting by Saeed Azhar and Lananh Nguyen; Editing by Nick
Zieminski)
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