Goldman Sachs has named David Solomon to be the successor of Lloyd Blankfein as the company’s chief executive and board chair. The announcement confirmed the long-awaited move alongside stronger-than-predicted profits for the second quarter.
Blankfein will be stepping down as the company’s chief executive on the 30th of September, prior to retiring as the chair of the company’s board at the end of the year. In a statement, Goldman disclosed that Blankfein will take the title of “senior chairman” after his retirement.
Prior to his appointment as the president and co-chief operating officer in 2016, Solomon co-headed the giant investment banking division of Goldman Sachs during the course of the reign of Blankfein.
Blankfein is stepping down on a strong note, as the bank published net revenues amounting to $9.4 billion – up by 19 percent year-on-year – and net earnings amounting to $2.57 billion for the second quarter, both well above the consensus expectations of analysts.
The US banking giant experienced its strongest second quarter in nine years, with the earnings per share during the first half of the year hitting a record $12.93. A key measure of shareholder profitability called annualised return on equity increased to 14.1 percent, the highest in nine years.
Goldman’s investment banking revenues increased by 18 percent as compared to the second quarter of the previous year because of the financial advisory and underwriting divisions, while the investment management arm was able to produce record quarterly revenues.
The trading operations of the company was also able to bounce back, with the fixed income, currency and commodities desk reporting 45 percent higher revenues because of increased volatility.
However, the short-term performance will be clouded by a changing of the guard at the top of what is considered to be one of the most prominent positions in global finance.
Blankfein has headed the bank since 2006. It guided the company through the global financial crisis, the massive reshaping of the banking sector, and the consequent slow recovery of the sector.
Blankfein stated: “Our firm has demonstrated great resiliency and strength over the last 12 years”
He added: “I’ve never been more optimistic about our ability to serve our clients effectively and generate industry-leading returns.”
On the other hand, Solomon said that he felt “honoured and humbled” to be appointed as the successor of Blankfein.