Following the release of Goldman Sachs‘s (NYSE:GS) quarterly earnings, which fell short of analyst expectations, Goldman revealed its intent to pull back from its consumer operations and focus its efforts on its Platform Solutions. At the same time, Goldman announced that it would sell GreenSky, an online lending platform for businesses and consumers, that Goldman acquired in 2021 in an all-stock transaction valued at approximately $2.24 billion. Goldman said they believe they were “not the best long-term holder” of the GreenSky business.
During the call, management said they are “narrowing focus in the consumer space” while focusing on scaling Platform Solutions like its partnership with Apple – including the newly launched Apple Savings feature. Goldman said they are “seeing positive momentum” in providing digital services for other firms, effectively banking as a service (BaaS).
Asked by Morgan Stanley if the “consumer repositioning” meant the consumer banking business was “done and dusted,” Goldman reiterated its “narrowing focus” comment as it seeks to bring these services to profitability. Goldman said there are other opportunities beyond the credit card and deposit services.
The loan portfolio originated by Marcus is up for sale, with Goldman having already sold $1 billion with the balance held for sale – approximately $3.5 billion. The balance will continue to generate income until exited.
As Apple (NASDAQ:AAPL) is now offering Savings at an interest rate of 4.15% – topping Marcus’ current 3.9%, one analyst asked about the possibility of cannibalization, and Goldman shared there was little overlap between the two segments.
Goldman has pivoted from direct-to-consumer to providing back-end services as a chartered bank for neobanks like Apple and others seeking to provide financial services like bespoke credit cards. This also creates an opportunity to provide wealth management services as well – so you may see Apple Wealth at some point in the future.
