Wall Street investment firm Goldman Sachs (GS) will probably post a $2 billion loss this quarter, due in part to the tumult of world markets.
In order to seek more stability, the bank is considering opening an online branch so it can offer more stable savings products such as certificates of deposit.
One of Goldman’s options for opening such a bank could be acquiring one. Reports the WSJ:
“This move is pretty much the polar opposite of what you think about when you think about Goldman Sachs,” said Glenn Schorr, an analyst at UBS AG. “But one of the keys to their future is being able to fund their balance sheet, and if they and others can’t do it in traditional ways, it makes complete sense to explore other avenues.”
Goldman will face competition ranging from traditional banks Bank of America Corp. and Citigroup Inc. to ING Direct, a unit of ING Groep NV that does much of its business online. Meanwhile, the banking industry’s hunger for stable funding sources has sharply increased the rates paid on deposits, squeezing profit margins.
Goldman executives haven’t ruled out acquiring a bank with substantial retail operations, according to people familiar with the discussions. But the firm’s decision to seek a state banking licence in New York is a sign that expanding across state lines is a low priority. Regulators approved the licence last week.