Please ensure Javascript is enabled for purposes of website accessibility

Goldman Sachs to Expand Its Cash Management Business

By Bram Berkowitz - May 26, 2020 at 11:39AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The investment bank plans to launch the service in the United Kingdom in September, and the rest of Europe by end of the year.

Goldman Sachs (GS 0.74%) is aggressively pushing ahead with the expansion of its cash management business, planning to debut it in the United Kingdom in September and across Europe by the end of the year, according to The Financial Times

Citing anonymous sources, The Financial Times also reported that Goldman will pay as much as 200 basis points (2 percentage points) more than rivals on some deposits, a big premium considering how low interest rates are now.

Another anonymous source said that Goldman's cash management deposit strategy would place it in the 70th percentile of its peers.

Goldman Sachs

Image Source: Goldman Sachs

A Goldman Sachs spokesperson declined to comment on the expansion, but told the newspaper, "we believe our intuitive, transparent technology will be our significant differentiator."

Cash management is the business of holding the funds that businesses use for ongoing operations, investing, and financing activities.

News of its planned market expansion comes as Goldman looks to diversify its revenue stream in response to waning profits. In particular, M&A activity has stalled as a result of the coronavirus pandemic.

In the first quarter, Goldman reported a roughly $1.1 billion profit, a 49% drop from Q1 2019. Net revenues declined slightly on a year-over-year basis even though the bank experienced tailwinds in investment banking, investment management, and commissions and fees in the quarter. 

In 2019, seeing profits decline in trading and investment banking, Goldman jumped into the credit card and savings accounts space. 

Earlier this month, rumors circulated that the bank might even be open to an acquisition or merger

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Goldman Sachs Group, Inc. Stock Quote
The Goldman Sachs Group, Inc.
GS
$299.23 (0.74%) $2.21

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
311%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/01/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.