Uber-analyst Meredith Whitney says it is “highly unlikely” that Goldman Sachs (GS) will snatch up a retail bank. Why? In short, because Goldman isn’t run by morons. Goldman has drastically outperformed its competitors through the credit crisis by avoiding some of the bets and businesses that have wrecked traditional retail banks like Wachovia (WB) and Bank of America (BAC), and it’s not about to plunge into those highly regulated businesses now. Whitney:
While much speculation has been made about Goldman’s interest in acquiring a retail bank, we believe the chances are less than slim. Management stated frankly that it was highly unlikely given the current regulation.
Instead, Whitney thinks that Goldman may follow in the footsteps of Lone Star Funds and snatch up some of the distressed mortgage assets that its competitors are dumping on the market:
Last year, Goldman raised a several-billion dollar fund to buy distressed mortgage assets, yet to date has put little to use. It is likely in our opinion that more portfolios are put on the market.
Whitney maintained her Perform rating.