One of Goldman Sachs’ biggest critics isn’t banking on things getting better anytime soon.
Wall Street analyst Dick Bove unleashed a blistering report on Lloyd Blankfein’s bank on Monday, doubting that execs can pull off its three-year turnaround plan to fix its trading slump, raising questions about the extent of its involvement in Venezuela, and calling for “transformational change.”
Last week, Goldman’s co-Chief Operating Officer outlined a plan to raise $5 billion in revenue by increasing investment in trading and other areas where it hasn’t traditionally focused, like lending.
But Bove isn’t buying it.
“Bottom line, Goldman is attempting to use its capital to ‘muscle-in’ to highly competitive businesses dominated by companies bigger than Goldman. Usually, this does not work,” he said in the Monday report.
During the first half of the year, Goldman, normally a powerhouse of bond trading, has been playing catch-up to its rivals. Last quarter, its trading revenue fell 40 percent while competitors gained.
Bove, who’s previously blamed Blankfein for a “lost decade” of management, says that the bank’s top employees are a little too chuffed with themselves to make any real change.
“Goldman perceives itself to be a partnership composed of extremely capable individuals,” he said. “It has yet to admit that since 2006 it has one of the worst records of any of the nation’s big six banks. It appears to be blind to its clear weaknesses.”