Goldman May Beat Wall Street ROE, Hintz Says: Tom KeeneLaura Marcinek and Michael J. Moore
Goldman Sachs Group Inc., the Wall Street bank that generates the highest percentage of revenue from trading, may be able to post a higher return on equity than competitors, according to Brad Hintz, a Sanford C. Bernstein & Co. analyst.
Goldman Sachs could generate ROE, a measure of how well the bank reinvests shareholder money, of 15 percent to 20 percent, Hintz said today in a Bloomberg Television interview with Tom Keene.
That would make the New York-based company an “outlier” among the biggest banks and Wall Street firms, which probably will generate ROE of about 12 percent to 15 percent, Hintz said. Banks will continue to trim compensation in an effort to boost returns, Hintz said.
The firm’s annualized ROE was 12.4 percent in the first quarter, above the 10.7 percent it reported for all of 2012. Chief Financial Officer Harvey Schwartz said last week that the firm doesn’t have enough information about pending regulations to provide a new target, which was set at a 20 percent return on tangible equity before the financial crisis.