Goldman Sachs Bank
Origin of Goldman Sachs Bank
Goldman Sachs was founded 1869 and is headquartered in New York. Goldman Sachs Bank AG was established 1974 and is located in Zurich. It all began as a branch office of Goldman Sachs, New York with three employees to serve institutional clients and has then been expanded over the years. In 1992 an independent bank was founded with a corresponding banking license under Swiss law and under the supervision of the FINMA. Goldman Sachs Bank has not only been growing regarding personnel, but also the range of services and products has become more and more extensive.
Today, Goldman Sachs Bank AG is one of the leading private banks in Switzerland, which manages the assets of very wealthy individuals around the world. Since 1994, Goldman Sachs Bank AG is also a member of the SWX Swiss Exchange. Another important step for Goldman Sachs was the opening of a branch in Geneva in the spring of 2001. The branch was shut down in 2016 in favor of the Zurich bureau and in a bid to improve efficiency. It seems though that Goldman Sachs is again thinking of opening a representative office in Geneva. Goldman Sachs employs about 100 people in Zurich.
Philosophy and Strategy
The business principles of Goldman Sachs are:
- Client’s interests always come first
- The assets are the people, capital and reputation
- The goal is to provide superior returns to the shareholders
- The size is an asset that has to be preserved
- Integrity and honesty are at the heart of the business
- Goldman constantly strives to anticipate the rapidly changing needs of the clients and to develop new services to meet those needs
Services and Solutions
Goldman Sachs offers high-net-worth individual clients first-class advice and services as well as the confidentiality and confidentiality that is customary in Switzerland. The principal activities of Goldman Sachs Bank AG are investment management, equities, and investment banking. The investment management takes care of asset management and advice to private clients, foundations, trusts and private companies. The Equities field of activity comprises the commission business with institutional clients, commission and proprietary trading in derivatives and electronic trading in Swiss equities. In investment banking, sources of financing for customers are developed and advised on corporate takeovers and mergers, the so-called mergers & acquisitions.
Goldman Sachs business segments include:
- Investment Banking
- Financial Advisory
- Institutional Client Services
- Fixed Income, Currency and Commodities Client Execution
- Equities Client Execution
- Financing Services
- Securities Lending Services
- Other Prime Brokerage Services
- Investing & Lending
- Investment Management
Investment Management provides wealth and investment advisory services to help customers grow and preserve their financial assets. The clients include institutions and high-net-worth individuals, as well as retail investors who primarily access the products through the digital retail bank Marcus.
The asset classes and investment strategies include equity, fixed income, and alternative investments. Alternative investment primarily consists of hedge funds, credit funds, private equity, real estate, currencies, commodities, and asset allocation strategies.
The investment offerings are either strategies managed by third-party managers or by Goldman Sachs portfolio managers. Goldman Sachs also provides customized investment advisory solutions depending on the client’s needs. The solution begins with identifying the client’s objectives and continues through the portfolio construction, ongoing asset allocation, and risk management and investment realization.
Investment Advisory Services
Goldman Sachs offers a suite of investment opportunities managed by themselves or by carefully selected external managers. The clients work with the Private Wealth Management teams to select from existing investment vehicles covering the entire asset spectrum.
Goldman Sachs’ Investment Strategy Group (ISG) is an independent team of global investment specialist which provides guidance on portfolio diversification and asset allocation. Clients can access the analyses of ISG and participate in a timely discussion on market activities.
Trading, Hedging, and Structuring Solutions
Clients can trade in multiple securities and asset classes around the world. Clients not only look for execution capabilities but also for structuring solutions and hedging to help them manage risks. Goldman Sachs provides industry-leading solutions, advice, and liquidity.
Wealth Advisory Services
Goldman Sachs’ Wealth Planning Group helps to identify and suggest solutions to tax issues, succession planning, investment vehicles, and business sales. The bank also helps clients and advisors to understand the tax and legal consequences of complex private equity products and structured hedge funds.
Goldman Sachs offers to clients in Europ, the Middle East, and Africa:
Swiss banking, asset custody services, and lending through Goldman Sachs Bank AG
Fixed-term cash management and overnight services through Goldman Sachs Bank Europe, based in Dublin
Risks are inherent in the financial business and include liquidity, market, credit, operational, model, legal, compliance, conduct, regulatory and reputational risks. Goldman Sachs believes that effective risk management is very important to the bank’s success. The risk management framework employs an integrated, comprehensive approach to risk management. The risk management process identifies, monitors, assesses and manages the risks.
The risk management structure combines three core components, the governance, the process, and the people. The Board of Directors oversees the risks directly and also through committees, including the Risk Committee. The Committee membership consists of senior managers from the revenue-producing units and also from the independent control and support functions. The independent control and support functions report to the CEO, the presidents, the CFO, and the chief risk officer, and are responsible for day-to-day monitoring and oversight of risks.
Internal Audit reports to the Audit Committee and includes professionals with a broad range of industry and audit experience. Internal Audit is responsible for independently validating and assessing key controls within the risk management framework.
In the autumn of 2017, Goldman Sachs was talking about an expansion of trading activities in Switzerland and also of an upgrade of the Zurich office into a branch. The bank filed applications to implement this plan and also the idea of reopening the Geneva office with FINMA. Goldman Sachs sees an advantage of banking in Switzerland due to MiFID II, the European financial market regulations in place since the beginning of 2018. MiFID II is putting pressure on brokers in Switzerland, and Goldman Sachs sees now a big chance to place itself as a market maker.
Goldman Sachs Bank – Facts & Figures
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|Phone||+41 44 224 11 44|
|Year of foundation||1869 (1974)|
|No. of employees||36’600|
|Chairman||Lloyd C. Blankfein|
|Shareholder’s equity||82.243 bn USD|
|Assets under Management||1’494 bn USD|
|Assets under Management / Employees||40.819 mm USD|
|Net profit||3.685 bn USD|
|Net Profit / Employees||100’683 USD|
|Tier 1 Ratio||13.9 %|
|Cost / Income Cost Ratio (CIR)||65.3 %|
|CEO||David M. Solomon|
Source: Annual Report Group 2017