New bank regulations and capital requirements are
“structural” changes to the industry that are more to blame for declining
profits than the U.S. economic slump, Goldman Sachs Group Inc. (GS) analysts told those good folks at Bloomberg.
“The operating environment is unlikely to change any time
soon, and we see shareholders of challenged banks becoming more demanding in
asking management teams to lay out a path to unlocking value in the near term,”
analysts led by Richard Ramsden in New York wrote in a report published today.
Their view contrasts with Goldman Sachs Chief Executive
Officer Lloyd C. Blankfein, who said in November, “I don’t think we can
conclude that the slowdown is secular rather than cyclical change.” Goldman
Sachs, based in New York, is the fifth-biggest U.S. bank by assets.
More than half of the top 25 U.S. banks aren’t earning
enough to cover their cost of capital, leading to stock prices that are
“significantly lagging previous global recoveries,” according to the note. “The
vast majority of the reduction relative to pre-crisis levels is attributable to
structural issues like deleveraging and regulatory reform.”
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