“We have $50 billion in deposits right now. They’re going to grow slowly over time and we’ll use that amount for loans,” Viniar said.
The announcement comes on the heels of a rough second quarter in which Goldman reported an 11% loss in net revenue. Many of its competitors such as JP Morgan and Bank of America already have large banking divisions.
To cultivate its private wealth division, Goldman is looking to make a push outside of the United States, especially into Asia-Pacific markets. Viniar said that the current portion of its wealth management operations that are outside the U.S. is “a very small number, but it’s a number we are looking to grow rapidly.”
“Growing our private wealth business outside of the U.S. has been a big focus of ours especially in Asian where we believe there is a lot of wealth that has been and is being created,” he said.
Viniar downplayed an earlier story by the Wall Street Journal, stating that the move will not represent a dramatic break with current strategy and the bank will continue to focus on lending to wealthy individual and corporate entities. According to Viniar, the firm has no intention of becoming a retail bank with branches and ATMs.
“I don’t think there is a big change in strategy coming. This is a part of who we are,” Viniar explained. “Private wealth is a good business for us.”