Goldman Sachs Group Inc.’s share price up, plans to expand its Europe activities

Goldman Sachs is to start offering loans to its exclusive network of very rich European, Middle Eastern and African clients, in a move to expand into the more secure private-banking sector.

The new lending unit has a goal of building up deposits up to $5 billion, mostly from the 1700 wealthiest clients, whose assets the London-based Goldman Sachs International Bank tends. With a minimum deposit of $10 million and an average of $40 million for its wealth management services, Goldmans aims at the very rich, and gains ground, adding 15% to the total assets in manages in Europe last year.

“Wealthy clients want leverage and they are good quality borrowers. The loan-to-value ratios are very conservative,” said Christopher French, Goldman’s head of private wealth management in the region, cited by the Financial Times. He added that the bank aims to attract its already existing clients instead of “a proposition to gain new clients”, unlike its Morgan Stanley competitors, who have established wider and more inclusive lending, retail and wealth management networks.

The company is said to also position for the London prime-property mortgage market, but is still awaiting regulatory approval, the Financial Times reported.

The bank explained that does not intend to increase its balance sheet for now, due to the fact that the loan book expansion contrasts with a sharp reduction in capital usage in some of its trading markets, especially when it comes to fixed income.

Goldman Sachs Group Inc. was 1.54% up to close at 169.46 dollars per share on Thursday, ahead of the July 4 US holiday, marking a one-year change of +12.65%. According to information published on CNN Money, the 25 analysts offering 12-month price forecasts for Goldman Sachs Group Inc. have a median target of 175.00, with a high estimate of 200.00 and a low estimate of 133.00. The median estimate represents a +3.27% increase from the last price of 169.46.