After reporting excellent earnings and revenue numbers for the second quarter, Goldman Sachs (GS) is taking forward the management reshuffle that started earlier this year. The Wall Street giant, which recently roped in banking veteran David Solomon to head its operations, has identified senior executive Jim Esposito as co-head of trading, following the recent departure of two top officials from the division.
According to sources close to the matter, Esposito was picked by the long-term executive and CEO-in-waiting David Solomon, who will be taking the reins of the New York-based bank by year-end. Esposito will be working with Ashok Varadhan who is currently heading the securities division.
Esposito was named co-head of trading, following the recent departure of two top officials from the division
One of the priorities of Solomon is to revitalize the equity unit and make it the most profitable among peers in the industry – a status it enjoyed until the recent downturn. Statistics show that revenues from the trading segment shrank by two-thirds over the past ten years.
It is expected that the management will make an official announcement regarding Esposito’s appointment this week, ending months of uncertainty over the future of the key business division. Operations of the securities division have been hit hard by the recent executive resignations, which came at a time when it has been going through one of the worst phases in history.
The securities division, which contributed to the above-consensus top-line growth in the most recent quarter, has witnessed several executive changes after its dismal performance last year. The sustained slump in trading, typically a highly profitable segment, dented Goldman’s prospects and it started losing market share to rivals Bank of America Corp. (BAC), JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C).
Esposito, who is currently serving as the co-chief operating officer at Goldman’s fixed-income division, will be occupying one of the two positions left vacant by Pablo Salame and Isabelle Ealet in June. He started his career with Goldman more than two decades ago as an equity salesman.
Goldman shares lost more than 8% since the beginning of the year. The stock, which rose to an all-time high in March, gained slightly in the pre-market trading Monday.