Goldman Sachs reviews direction on commodities after first-half slump
London/New York — Goldman Sachs, the dominant commodities trader on Wall Street, is reviewing the direction of the business after a slump in the first half of the year, according to sources. By reconsidering the bank’s long-held view that the downturn in profitability is cyclical and will eventually reverse, CEO Lloyd Blankfein, who started his career in the commodities business, is drawing closer to the industry’s prevailing wisdom. Morgan Stanley, JPMorgan Chase, Barclays and Deutsche Bank have cut back or exited commodities trading in recent years amid falling revenue and tougher regulation. While the bank flagged the poor results for the first quarter — without giving specific numbers — the weakness has continued and the unit’s start to the year has been the worst in more than a decade, said one source, who asked for anonymity to discuss internal deliberations. The commodities division was one of the topics of discussion at a board meeting held in London late last month, sources...
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