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Goldman Sachs CFO Scherr Says Bank Is ‘Very Open’ to Acquisitions

Speculation abounds about Goldman’s appetite and ability for M&A since Morgan Stanley's announcement it was buying E*Trade.

Image: Goldman Sachs CFO Stephen Scherr. Source: Goldman Sachs

By Elizabeth Dilts Marshall

NEW YORK (Reuters) – Goldman Sachs Group Inc Chief Financial Officer Stephen Scherr said on Tuesday the bank is “very open” to acquisitions, especially those that would speed the growth of its existing businesses.

“We’re … very open to the proposition of acquisitions that fill gaps or accelerate elements of our growth plan,” Scherr said at a conference convened via conference call and webcast, rather than in-person, due to concerns about the coronavirus outbreak.

There has been wide investor speculation about Goldman’s appetite and ability to do mergers or acquisitions since rival Wall Street bank Morgan Stanley announced plans last month to buy discount broker E*Trade.

Goldman Chief Executive David Solomon has set ambitious targets for the bank to grow its fledgling online consumer bank, Marcus, its credit card business and cash management platform. But industry insiders are skeptical that it can grow quickly without doing a deal.

Scherr said the bank is not currently looking to do “larger material transactions … in the near term.”

“I think you’ll find us to be much more acquisitive in the context of accelerating and facilitating the growth of business initiatives that are there, none of which would necessarily present themselves as… material to the firm overall,” he added.

Scherr also touched on the coronavirus and its impact on the bank’s day-to-day operations and markets.

He said the bank currently has no known cases of coronavirus among its staff, but that it continues to roll out precautionary measures, including splitting teams up to work at separate locations and having some staff work from home on a rotating basis.

Scherr said the bank is monitoring risk across all market sectors and has seen a “reduction broadly in liquidity” and some challenges in the “cost of funding.” But he said there are no major signs that corporate clients are under stress.

Reporting By Elizabeth Dilts Marshall; Editing by Chizu Nomiyama and Nick Zieminski.


Source: Reuters