NEW YORK–When Goldman Sachs made a big splash by entering the retail banking market in 2016, it was considered another shot across the bow of credit unions. But it turns out it was the giant investment bank that has suffered most.
Goldman Sachs announced its consumer lending business has lost slightly more than $3 billion since 2020. The bank announced the results ahead of release of its fourth quarter earnings.
In October 2022, Goldman Sachs announced a sweeping reorganization that combined its flagship investment-banking and trading businesses into one unit, while merging asset and wealth management into another.
As the New York Times reported, Marcus, Goldman’s consumer-banking arm, launched in 2016 to a strong start with the introduction of savings accounts, personal loans and credit cards. Its 2019 it announced a credit-card partnership with Apple Inc. that “signaled its ambitions to be a big player in the business,” the Times reported, adding the unit has never been profitable and Goldman has now scaled back its retail banking plans.
Folded Into New Unit
“Much of Marcus will be folded into Goldman’s new asset and wealth management unit,” the Times reported. “Some pieces, including its credit-card partnerships with Apple and General Motors Co., as well as specialty lender GreenSky, is moving into a new unit called Platform Solutions.”
Goldman also disclosed the Platform Solutions unit lost $1.2 billion in the nine months that ended in September 2022. It lost slightly more than $1 billion in 2021 and $783 million in 2020, after accounting for operating expenses and money set aside to cover possible losses on loans. The unit also includes transaction banking, which includes services like enabling banks to send payments to each other, vendors and elsewhere, the Times added.
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