Goldman Sachs (NYSE:GS) 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.
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.