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Goldman Sachs pares risk after tariff move, braces for more uncertainty
By Saeed Azhar NEW YORK (Reuters) -Goldman Sachs has moderated its risk-taking since U.S. President Donald Trump's April tariff announcement, and the Wall Street bank is braced for more uncertainty, a top executive said. "We have moderated our risk positioning since April 2nd - I think that's a sensible thing for us to do," Goldman President John Waldron said in a podcast released by the investment bank on Thursday. "We're absorbing a lot of risk from our clients. We want to continue to do that, but we also, where we can, we (pare) our risk and stay a little bit closer to home." Goldman is readying for continued uncertainty in the coming months, which means keeping a greater liquidity cushion, he said. Financial markets have been turbulent since Trump's so-called "Liberation Day," when he announced plans to increase tariffs on trading partners. Waldron, who is widely seen as the likely successor to Goldman CEO David Solomon, said the tariff move was "very, very disruptive." Some companies are now starting to make business decisions based on assumptions that tariffs will be raised to a range of 10% to 15%, he said. "We're moving into now an adjustment phase, and you'll see, I think, some more decision-making on capital spend, M&A transactions, capital return, stock buybacks," Waldron said. The U.S. economy is still strong, backed by a solid labor market and consumer spending, he said. "All those factors in the U.S. to me lead to a likely scenario where we don't have a recession," he said. Meanwhile, Waldron warned investors were getting concerned about an unsustainable U.S. fiscal deficit. "The bond market is starting to be heard, and I hope that gets some attention in the halls of Congress," he said. Rating agency Moody's cut the pristine U.S. sovereign credit rating by one notch last month, the last of the major ratings agencies to downgrade the country, citing concerns about the nation's growing $36 trillion debt pile. The biggest question for markets is the path of interest rates, particularly in the long term, Waldron said. "We're seeing a lot of increase in duration in the rate curves in the United States and Japan and many other countries - and I think that could be a brake on economic growth," he said.
Yahoo
30-05-2025
- Business
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HSBC to close its US business banking unit to simplify operations
By Jaiveer Shekhawat and Saeed Azhar (Reuters) -HSBC is exiting its business banking portfolio in the United States, as it continued to simplify operations and shift its focus to Asia and Middle East markets. "Following a strategic review of our business, we have decided to exit our Business Banking portfolio in the United States," it said in a statement. "We are supporting impacted clients while they transition to a suitable alternative provider and will retain some clients in our Mid-Market and Global Network Banking business," it added. The Wall Street Journal reported on Friday that HSBC's move would affect about 4,500 clients. The UK-headquartered lender has been reducing its global footprint in an attempt to boost profits and expand in Asia and Middle East markets. The bank said in January it would wind down M&A and some equities businesses in the Americas and Europe. The Wall Street Journal said HSBC laid off 40 employees in the U.S. business banking division. HSBC declined to comment, In 2021, the bank said it was withdrawing from U.S. mass market retail banking by selling some parts of the money-losing business and winding down others. It sold its Canadian business to Royal Bank of Canada in 2022 for C$13.5 billion. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
29-05-2025
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Ex-Goldman banker Leissner sentenced to two years in prison in 1MDB case
By Saeed Azhar NEW YORK (Reuters) -Former Goldman Sachs banker Tim Leissner was sentenced to two years in prison by a judge in a New York court on Thursday after playing a key role in a multi-billion dollar scandal involving Malaysia's sovereign fund 1MDB. Malaysian and U.S. authorities estimated $4.5 billion was stolen from 1MDB in an elaborate scheme that spanned the globe and implicated high-level officials in the fund, former Malaysian Prime Minister Najib Razak, Goldman executives and others. Leissner, a former Southeast Asia chairman for Goldman, pleaded guilty in 2018 to a conspiracy to violate the Foreign Corrupt Practices Act and participating in a money laundering conspiracy, all tied to his role in the 1MDB scandal. Leissner's conduct was "brazen and audacious," judge Margo Brodie said during sentencing. While his cooperation with the government was taken into account, it did not make up for the harm caused by the corruption at the highest levels in several countries, the judge said. "First and foremost, I offer my sincere apology to the people of Malaysia," Leissner, 55, told the hearing, his voice breaking as he read a statement. "I deeply regret my actions." Goldman helped sell $6.5 billion of bonds for 1MDB, which former Malaysian Prime Minister Najib set up with the help of Low to promote economic development. Some of the funds were diverted to offshore bank accounts and shell companies linked to Malaysian financier Jho Low, who is now a fugitive. Leissner became a U.S. government witness in the case after his arrest in 2018. He was allowed to remain free after he agreed to help the government in the investigation and testified against former banking colleague Roger Ng. Ng has pleaded not guilty to charges of conspiring to launder money and violate an anti-bribery law. The former head of investment banking for Goldman in Malaysia was convicted in Brooklyn and sentenced to 10 years in prison, but transported to Malaysia in 2023 to assist probes there. Leissner met with the government on dozens of occasions, reviewing countless documents and communications he received related to the 1MDB scheme and other matters, according to a filing by prosecutors. "We respect the court's decision today and Mr. Leissner is prepared to serve his sentence and continue his future life of good works and care for his family," said his lawyer Henry Mazurek, a partner at Meister Seelig & Fein PLLC. Prosecutors requested the court impose a sentence below the applicable guidelines range due to Leissner's cooperation in the probe. ONLY CRIMINAL CASE AGAINST GOLDMAN Leissner told the court that he had lost his freedom, family and financial independence in the wake of the scandal. The former executive said his health also suffered, and that he took pills and lost the will to live. Goldman said in a letter to the court on May 21 that Leissner deceived his colleagues for years, culminating in the only criminal case filed against Goldman in its 156-year history. Goldman in 2020 paid a record $2.9 billion fine in the United States and arranged for its Malaysian unit to plead guilty in U.S. court. It also clawed back $174 million in executive compensation. Malaysia's former prime minister Najib was found guilty in 2020 of criminal breach of trust and abuse of power for illegally receiving funds misappropriated from a unit of state investor 1Malaysia Development Berhad. Malaysia's top court in 2022 upheld a guilty verdict against Najib, sentencing him to 12 years in prison. The sentence was later halved by a pardons board chaired by Malaysia's former king. The former premier is currently in prison and is pursuing a legal bid to compel authorities to entitle him to serve the remainder of his sentence at home.
Yahoo
14-05-2025
- Business
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Goldman Sachs says investors trim dollar holdings, return to neutral position on US
By Saeed Azhar and Megan Davies NEW YORK (Reuters) -Goldman Sachs President John Waldron said a recent lightening up of U.S. dollar assets by investors had shown them returning to more neutral positions on the currency, rather than a wholesale "run for the gates." Financial markets have witnessed a roller-coaster ride in the initial few months of the Trump administration as its April 2 move to increase tariffs on trading partners prompted some investors to move away from American assets. The White House has since made progress on tariff deals. Waldron said that some investors "that were owning 10%, 20%, 30% more U.S. dollars in U.S. assets than they would otherwise be holding" had gone back to a more neutral position. Waldron said investors had been optimistic about the U.S. outperforming the rest of the world. "Everybody, for the most part, had some expression of overweight U.S.," he said. But after the tariff announcement, clients had been active repositioning portfolios in currencies, Waldron said. "The lightening up (of dollar holdings) we've seen (since April 2) is more the excess coming out, not a wholesale run for the gates," Waldron told Reuters in an interview. "Is there a sense that the volatility of U.S. policymaking is higher, and therefore we should be reducing our holdings? We haven't seen that yet." Waldron, 55, was added to Goldman's board of directors earlier this year, a few weeks after he was given a retention bonus, cementing his position as a potential successor to CEO David Solomon. TRUCE The recent truce in the U.S.-China trade war has since set off a relief rally in stocks and propelled the dollar higher with the S&P 500 and the Nasdaq recovering losses since April 2 - or "Liberation Day" - when President Donald Trump announced sweeping reciprocal tariffs. "The market is -- I'd call it relatively benign in the context of what was going on," Waldron said. Waldron said that there was demand from investors for access to Chinese equities and fixed income products, and said that American firms were able to operate in China despite challenges. "I wouldn't overstate the challenges between the two governments in terms of our ability to operate," said Waldron. "We can operate. The American firms are operating." Waldron said most companies are trying to figure out how to navigate the impact of relatively higher tariffs from a cost standpoint. "How much of this are we going to ... pass through on price? How much of this are we going to push back on our suppliers? Who's going to bear the brunt of these tariffs? And the answer is it will be shared," he said. He said the tariff moves have also affected mergers and acquisitions, halting fresh dealmaking. "If you were working on an M&A transaction, you were getting started on it or you were getting into it, you're probably pausing it," he said."If you were at the five-yard line and you were getting close to announcing it and it's not overly impacted by tariffs, you're probably going to go ahead and do it, and we've seen both." Goldman Sachs is advising Hong Kong conglomerate CK Hutchison, sources previously told Reuters. The firm is selling most of the $22.8 billion ports business to U.S. firm BlackRock, including assets it holds along the Panama Canal. The number of M&A contracts announced across the world - an indicator of global economic health - fell in April to the lowest level in more than 20 years, according to data compiled by Dealogic for Reuters.
Yahoo
14-05-2025
- Business
- Yahoo
Goldman Sachs says investors trim dollar holdings, return to neutral position on US
By Saeed Azhar and Megan Davies NEW YORK (Reuters) -Goldman Sachs President John Waldron said a recent lightening up of U.S. dollar assets by investors had shown them returning to more neutral positions on the currency, rather than a wholesale "run for the gates." Financial markets have witnessed a roller-coaster ride in the initial few months of the Trump administration as its April 2 move to increase tariffs on trading partners prompted some investors to move away from American assets. The White House has since made progress on tariff deals. Waldron said that some investors "that were owning 10%, 20%, 30% more U.S. dollars in U.S. assets than they would otherwise be holding" had gone back to a more neutral position. Waldron said investors had been optimistic about the U.S. outperforming the rest of the world. "Everybody, for the most part, had some expression of overweight U.S.," he said. But after the tariff announcement, clients had been active repositioning portfolios in currencies, Waldron said. "The lightening up (of dollar holdings) we've seen (since April 2) is more the excess coming out, not a wholesale run for the gates," Waldron told Reuters in an interview. "Is there a sense that the volatility of U.S. policymaking is higher, and therefore we should be reducing our holdings? We haven't seen that yet." Waldron, 55, was added to Goldman's board of directors earlier this year, a few weeks after he was given a retention bonus, cementing his position as a potential successor to CEO David Solomon. TRUCE The recent truce in the U.S.-China trade war has since set off a relief rally in stocks and propelled the dollar higher with the S&P 500 and the Nasdaq recovering losses since April 2 - or "Liberation Day" - when President Donald Trump announced sweeping reciprocal tariffs. "The market is -- I'd call it relatively benign in the context of what was going on," Waldron said. Waldron said that there was demand from investors for access to Chinese equities and fixed income products, and said that American firms were able to operate in China despite challenges. "I wouldn't overstate the challenges between the two governments in terms of our ability to operate," said Waldron. "We can operate. The American firms are operating." Waldron said most companies are trying to figure out how to navigate the impact of relatively higher tariffs from a cost standpoint. "How much of this are we going to ... pass through on price? How much of this are we going to push back on our suppliers? Who's going to bear the brunt of these tariffs? And the answer is it will be shared," he said. He said the tariff moves have also affected mergers and acquisitions, halting fresh dealmaking. "If you were working on an M&A transaction, you were getting started on it or you were getting into it, you're probably pausing it," he said."If you were at the five-yard line and you were getting close to announcing it and it's not overly impacted by tariffs, you're probably going to go ahead and do it, and we've seen both." Goldman Sachs is advising Hong Kong conglomerate CK Hutchison, sources previously told Reuters. The firm is selling most of the $22.8 billion ports business to U.S. firm BlackRock, including assets it holds along the Panama Canal. The number of M&A contracts announced across the world - an indicator of global economic health - fell in April to the lowest level in more than 20 years, according to data compiled by Dealogic for Reuters. Sign in to access your portfolio
