Two recent developments have soured Bove even more on Goldman: It's decision to drop its market-making role in U.S. options exchanges, and some business dealings with the deeply troubled Venezuelan government.
The complaints are just the latest salvos from Bove, who sees the bank as being in need of new management. He had first called for Blankfein to be removed in July and earlier in the year had lowered his rating on the bank from "buy" to "hold."
"I am not a fan of Goldman Sachs and have repeatedly expressed my concern about
the company's leadership," the Vertical Trading Group analyst wrote in a note to clients. "My problem is that Goldman never understood the changes in its core businesses and, therefore, continued to pursue its traditional business model when it was evident that this model was no longer relevant."
After a sharp rally following President Donald Trump 's election in November, Goldman has been a laggard, underperforming both the broader market and its peers. Shares are up just 2.2 percent this year at a time when the S&P 500 has rallied nearly 16 percent and the SPDR Bank ETF has gained 4.6 percent.
Bove charged that the bank has missed out on the big move to passive investing and exchange-traded funds, while also taking on questionable dealings with Venezuela. Goldman has lost money on bonds it bought from the country's state-run oil company and still is shadowed by a transaction it made with a Portugese bank that loaned to Venezuela, which is on the edge of a potential debt default , he said.
Goldman's market-making revenue has dropped from $29.7 billion in 2007 to $14.8 billion in 2017, according to Bove, coming as the market has switched to passive investing and automated trading.
"What is being revealed by the business model errors and the Venezuelan activities is bad judgement," he wrote. "This bad judgment has led to 10 years of earnings weakness. This company has an insular management team that sees itself as a partnership. It is not. It is a publicly owned company that, in my opinion, needs outside blood to change its direction."
Goldman again beat Wall Street estimates for third-quarter earnings , turning in profit of $5.02 a share vs. expectations of $4.17, but the company again came up light in trading revenue. In fact, a company official said the commodities side was on its way to its worst full-year performance since the company went public in 1999.
Though analysts had expected the earnings performance to boost investor sentiment, shares have been flat since the report.
Goldman officials declined comment.