(Bloomberg) -- Goldman Sachs Group Inc. said it identified “opportunities to cut expenses” in the commodities division, some of the first public comments from the bank on how it's reshaping a business that was once the envy of Wall Street.
The commodities unit, for decades the leading franchise among banks in the sector, has been under scrutiny from investors and analysts since a dire performance in 2017 that the bank said was the worst in its history as a public company.
It has been part of a sweeping review of operations under Chief Executive Officer David Solomon and Bloomberg last month reported that the bank had cut 10 staff in the unit, mostly in metals and bulk commodities. It wasn't clear from the comments today if there are more cuts to come.
On Monday, the bank made some of its most definitive comments to date on the future. Chief Financial Officer Stephen Scherr said the review had “identified opportunities to cut expenses and capital from certain under-performing parts of the commodities business”. Still, “we remain committed to the business,” he said.
While the commodities division has been at the forefront of scrutiny within the trading business, its performance has improved. The bank said that net revenues from commodities were higher in the first quarter of this year than the same period in 2018, which was in turn “significantly higher” than in 2017.
To contact the reporter on this story: Jack Farchy in London at jfarchy@bloomberg.net
To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net, Stuart Wallace, Dylan Griffiths
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