For Goldman Sachs Group Inc.’s millionaire clients, it can take the firm 5 minutes to underwrite a loan to start a new business or pay down taxes. At Morgan Stanley, bankers are keen to give you bridge financing so you can bid for your mansion in cash.
Beyond the billions in trading gains and deal fees, the Wall Street firms’ profit reports this week showed they’re increasingly rushing into the booming market for lending to high-net-worth individuals. So far, it’s paying off: Morgan Stanley has tripled those loans in the past five years, while Goldman Sachs is expanding overseas.
Forced into becoming bank holding companies by the financial crisis, the firms have embraced the lending business in recent years. Morgan Stanley set a goal to double the percentage of clients that got loans from the bank after its acquisition of Smith Barney. Goldman Sachs has pegged a key chunk of its revenue growth plan to increasing lending to wealth management customers.
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Goldman and Morgan Stanley Want to Lend the Ultra-Rich More Money