Goldman Pitches Strategy Pivot as Firm Targets Areas for Growth

(Bloomberg) -- Goldman Sachs Group Inc. is sketching out more details of its expansion into new businesses.

Transaction banking will be one focus as the firm prepares to roll out a new cash-management system, President John Waldron said in a presentation Friday. If last year was about developing a fledgling consumer-finance business, the coming year will highlight attempts to attract cash deposits from corporations.

Waldron said the firm is an ``unsatisfied customer'' of existing cash-management services, and that's one reason it sees potential for growth in its transaction-banking business. ``We expect to build a better product,'' he said.

The firm has said it expects about $100 million in expense savings from using a home-grown product to manage its own cash. Now the company hopes to start persuading other corporations to move their money to the new business.

``We'll pay for the deposits because it's attractive funding for Goldman Sachs,'' Waldron said at the Bernstein Strategic Decisions Conference.

The executive also pointed out efforts to broaden wealth-management offerings, which are still largely limited to a niche, ultra-rich crowd. That push came into focus earlier this month with the $750 million purchase of wealth manager United Capital.

The takeover will add about $25 billion in assets under management and help Goldman Sachs make inroads with what it calls the mass-affluent, reducing its reliance on ultra-high-net-worth individuals. The business will work in concert with its Ayco unit, which offers financial planning to executives at corporate clients.

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Steve Dickson, Daniel Taub

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