Business

David Solomon to succeed Lloyd Blankfein as Goldman Sachs boss

Goldman Sachs has appointed David Solomon to succeed Lloyd Blankfein as its board chair and chief executive, confirming the long-expected move alongside stronger-than-predicted profits in the second quarter.

Blankfein will step down as chief executive on 30 September, before retiring as chair at the end of the year. Blankfein will take the title of "senior chairman" after retiring, Goldman said in a statement.

Solomon co-headed Goldman's giant investment banking division during the course of Blankfein's reign, before being appointed president and co-chief operating officer in 2016.

Blankfein went out on a strong note, as the bank reported net revenues of $9.4bn – 19 per cent up year-on-year – and net earnings of $2.57bn for the second quarter, both well above analysts' consensus expectations.

The US bank enjoyed its strongest second quarter in nine years, with earnings per share in the first half of 2018 hitting a record $12.93. Annualised return on equity, a key measure of shareholder profitability, rose to 14.1 per cent, the highest in nine years.

Investment banking revenues grew by 18 per cent compared to the second quarter of 2017 thanks to financial advisory and underwriting divisions, while the investment management arm produced record quarterly revenues.

Trading operations also bounced back, with the fixed income, currency and commodities desk reporting 45 per cent higher revenues thanks to increased volatility.

Yet the short-term performance will be overshadowed by a changing of the guard at the top of one of the most prominent roles in global finance.

Blankfein has led the bank since 2006, guiding it through the global financial crisis, the massive reshaping of the banking sector which followed, and the subsequent slow recovery of the sector.

“Our firm has demonstrated great resiliency and strength over the last 12 years,” Mr. Blankfein said. “Ive never been more optimistic about our ability to serve our clients effectively and generate industry-leading returns.”

Solomon said he felt "honoured and humbled" to be appointed.

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