Commodities trading at Goldman Sachs Group Inc., GS, +0.10% once a huge moneymaker and a central part of the bank’s DNA, is on the chopping block.
Goldman plans cuts to its commodities arm after a monthslong review showed the business uses too much capital for too little profit, according to people familiar with the matter. Executives are discussing pulling back in some areas, such as the physical trading of iron ore, platinum and other metals, and reducing costs associated with the sprawling storage and transportation network required to support its trading operations.
Cuts to the commodities business are among a series of planned changes that executives will present to Goldman’s board later this month, people familiar with the matter said.
A spokesman said the firm hadn’t reached any final conclusions related to its business reviews, which remain ongoing.
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