Lananh Nguyen is the U.S. finance editor at Reuters in New York, leading coverage of U.S. banks. She joined Reuters in 2022 after reporting on Wall Street at The New York Times. Lananh spent more than a decade at Bloomberg News in New York and London, where she wrote extensively about banking and financial markets, and she previously worked at Dow Jones Newswires/The Wall Street Journal. Lananh holds a B.A. in political science from Tufts University and an M.Sc. in finance and economic policy from the University of London.
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Focus: Goldman Sachs CEO’s growth strategy gets traction with board-sources
NEW YORK, July 18 (Reuters) – Goldman Sachs’ (GS.N) board supports CEO David Solomon’s focus on its core Wall Street businesses and asset management, according to two sources close to Solomon.
The executive is tasked with reviving the bank’s stock, even as scepticism from some investors and employees grows.
The 12-member board of directors is intensely focused on Solomon’s refreshed strategy, one of the two sources told Reuters, after the firm’s foray into the consumer banking business saddled Goldman with losses and left if lagging rival Morgan Stanley.
The expected arrival of Tom Montag, who was approached by Solomon, also signals to insiders that the chief executive and his turnaround plans have internal support at the top, separate sources said.
The assessment, which follows Goldman’s recent board meeting in India, has not been previously reported. It shows that the circle around Solomon believe in his ability to revive the bank’s fortunes.
The bank’s shares have fallen about 2% in 2023, lagging competitors Morgan Stanley (MS.N) and JPMorgan Chase (JPM.N) where shares have risen 8% and 15%, respectively. Even so, Goldman’s stock is still outperforming the S&P banks index, which is down more than 3% this year.
Goldman is trading at a forward price-to-book multiple of 0.99 times compared to JPMorgan, which trades at 1.43 times and Morgan Stanley’s 1.53 times, according to Refinitiv’s Eikon data.
The bank declined to comment on its share price performance.
LOST FAITH?
David Wagner, a portfolio manager at Aptus Capital Advisors, exited his small position in Goldman Sachs months ago because he was unimpressed with managers’ handling of the consumer business.
“The inability to execute on this front has led us to believe that there is a lot of internal strife at the company, which could create employee retention problems in the future as faith in David Solomon could be lost,” Wagner said.
Analysts have questioned the banks’ reorganization, which the bank argued strengthened its core business.
The firm has been belt-tightening in an ongoing push to cut $1 billion in costs, targeting smaller and smaller line items and contemplating more job cuts, sources previously said.
More bad news is expected on Wednesday when the bank is likely to report an almost 59% drop in earnings per share in its second-quarter results along with a writedown on fintech business GreenSky. Marcus, the consumer business, lost $3 billion in three years, and is being wound down.
BOARD BOOST
Solomon approached former Bank of America Chief Operating Officer Tom Montag after his retirement to discuss a Goldman board seat, according to two sources with knowledge of the situation. Montag was recommended by the board’s nominating committee to join as an independent director, according to a regulatory filing last month.
Montag previously worked at Goldman for 22 years and served as the co-head of its global securities business. Known as an intense and hands-on boss, he is expected to fortify Solomon’s position, according to five senior sources who worked with the executives.
The board’s secretary did not respond to direct requests for comment. Several board members did not respond to requests for comment, while others could not be reached for comment.
A Goldman Sachs spokeswoman said in a statement: “David and the leadership team are focused on executing on the strategic goals we laid out at investor day to grow and strengthen our existing businesses, diversify our products and services and operate more efficiently.”
Solomon did not respond to a Reuters request for comment.
The Wall Street giant laid off hundreds of staff in the second quarter, adding to a round of cuts in January of about 3,200 employees, the biggest reduction since the 2008 financial crisis.
In response to question about departures of senior executives including partners, the spokeswoman added that Goldman partners are staying longer, with their average tenure rising to 8.3 years in 2022 from 6.2 years in 2010.
STILL NO. 1
Solomon took the top job in 2018, leaning into Goldman’s consumer business to broaden earnings beyond volatile revenue from trading and dealmaking. The retail operations struggled to gain traction against well-established consumer banks, prompting the bank to set aside billions to cover potential loan losses.
Even after its ill-fated foray in consumer banking, the investment bank still ranked as the top adviser for global mergers and acquisitions in the first half of this year, according to Dealogic.
Goldman’s enduring influence was on show at a recent board meeting convened in India last month, which included a meeting with Prime Minister Narendra Modi.
Board member and billionaire steel magnate Lakshmi Mittal hosted a reception for Goldman clients and government officials at his luxurious residence in New Delhi, according to a source who attended the event. Mittal’s company ArcelorMittal did not respond to a request for comment about the meeting.
“Just got back from an incredible trip to India where our leadership team and I met with our board of directors,” Solomon wrote in a LinkedIn post with photos of the group.
Reporting by Saeed Azhar and Lananh Nguyen; Editing by Megan Davies and Anna Driver
Our Standards: The Thomson Reuters Trust Principles.
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Italian state railways plans 1.3 bln euro investment in solar plant
Italian state railways Ferrovie dello Stato plans to invest 1.3 billion euros ($1.36 billion) in a photovoltaic plant with an initial 1 gigawatt (GW) capacity that would cover 19% of its energy needs by 2029, the CEO said in a newspaper interview.
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Christmas in Puerto Rico is a 45-day celebration with caroling, festive decorations, family feasts and more
Christmas, Navidad in Puerto Rico, extends far beyond Dec. 25.
The island proudly proclaims itself as having the “longest holiday season in the world,” according to the website Discover Puerto Rico.
On average, the holiday festivities in Puerto Rico last about 45 days, per the source, commencing right after Thanksgiving, and stretching all the way through mid-January.
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The holiday season in Puerto Rico is full of rich traditions beloved by families.
One tradition those who visit Puerto Rico will immediately notice during the holiday season is decorations.
In Puerto Rico, decorations are typically put up by Thanksgiving, and kept up until the season concludes in mid-January, with opportune picture moments at every corner.
Parrandas, Christmas caroling, is a holiday staple.
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Carolers choose houses of family and friends to visit, typically starting around 10 p.m., performing aguinaldos (traditional Christmas songs), with not only their voices, but often with instruments as well, according to Discover Puerto Rico.
The group you begin caroling with is likely not the same group you end with.
In Puerto Rico, when carolers visit a house, they’ll often stop inside for conversation, food and drink before moving to the next residence.
Usually, the residences of the house visited will join the group for the next house, according to Discover Puerto Rico.
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A night of serenading loved ones can last quite a while, often stretching into the early morning hours of the following day, according to the source.
The biggest day of the holiday season in Puerto Rico actually isn’t Christmas, but instead, the night before.
In Puerto Rico, Dec. 24 is Nochebuena. On that day, loved ones gather for the exchange of gifts, caroling and a large feast.
Many families will also attend a midnight Mass on the day, known as Misa de Gallo.
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After Christmas passes, the festivities go on in Puerto Rico.
Another big event in the holiday lineup is Three Kings Day on Jan. 6, a holiday that “commemorates the visit that the Three Wise Men paid to Jesus after his birth,” according to Discover Puerto Rico.
On the eve of the day, children fill up a shoebox with grass to be left for camels to munch on while the Three Kings leave behind gifts for them, according to PuertoRico.com.
For a particularly festive Three Kings Day, Juana Díaz is the place to go, as it hosts the largest celebration in Puerto Rico for the holiday. In Juana Díaz, there is an annual festival and parade in honor of Three Kings Day that brings together over 25,000 people every year, according to Discover Puerto Rico.
Then, eight days later is Octavitas, a post-holiday celebration where families get together and celebrate one last time for the season.
The end of the holiday season is marked with the San Sebastián Street Festival.
This festival, spanning over multiple days, takes place in Old San Juan, and is filled with live music, dancing, shopping and parades.
World
Small plane crashes into Brazil town popular with tourists, killing 10
Twin-engine plane crashed in largely residential neighborhood of Gramado shortly after takeoff, authorities say.
A small plane has crashed into a tourist hotspot in southern Brazil, killing all 10 people on board and injuring more than a dozen people on the ground, officials have said.
The twin-engine Piper PA-42-1000 hit the chimney of a home and the second floor of a different house before crashing into a shop in a largely residential neighbourhood of Gramado shortly after takeoff from Canela, Brazil’s Civil Defense agency said on Sunday.
Rio Grande do Sul Governor Eduardo Leite told a news conference that the aircraft’s owner and pilot, Luiz Claudio Galeazzi, was killed along with nine members of his family.
Leite said that 17 people on the ground were injured, 12 of whom were still receiving treatment in hospital.
Galeazzi’s company, Galeazzi & Associados, confirmed that its CEO and Galeazzi’s wife and three daughters had died in the crash.
“Luiz Galeazzi will be forever remembered for his dedication to his family and for his remarkable career as a leader of Galeazzi & Associados,” the company said in a post on LinkedIn.
“In this moment of immense pain, Galeazzi & Associados is deeply grateful for the expressions of solidarity and affection received from friends, colleagues and the community. We also sympathize with all those affected by the accident in the region.”
Gramado, located in the Serra Gaucha mountains, is a popular destination for vacationers, especially during the Christmas season.
The crash comes a little more than a year after Brazil suffered its worst air disaster in nearly two decades when a twin-engine plane crashed in the southeastern city of Vinhedo, killing all 62 people on board.
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