Goldman Sachs Reports $1.2B Loss on Consumer Platforms in 9 Months

Goldman Sachs’ credit card and installment lending business lost $1.2 billion during the first three quarters of 2022.

The firm said in a Thursday (Jan. 12) SEC filing that its Platform Solutions business also lost $1 billion in 2021 and $783 million in 2020.

Platform Solutions includes consumer platforms, such as partnerships offering credit cards and point-of-sale (POS) financing, as well as transaction banking and other services for corporate and institutional clients, according to the filing.

These losses follow Goldman Sachs’ efforts to build Marcus, a digital-only bank that was to bring the Goldman imprimatur to Main Street retail customers.

Goldman had been pouring time and money into the unit but has more recently been giving some renewed scrutiny to its blueprint for its retail and digital banking aims.

In October, Marcus was folded into the company’s asset and wealth management unit and Goldman Sachs CEO David Solomon said the firm would renew its direct-to-consumer (D2C) strategy.

“We will focus on existing deposit customers and consumers that the bank already has access to through channels like workplace and personal wealth, rather than seeking to acquire customers on a mass scale,” Solomon said Oct. 18 during the company’s quarterly earnings call.

Management also said during the call that Goldman Sachs is “deliberately positioning ourselves” to attract deposits but will not be a “price leader.”

The decision to fold the consumer banking unit into other operations was reportedly a subject of conflict between Solomon and other executives.

The end of Marcus was part of one of the 153-year-old Goldman’s most thorough reorganizations in its history and its fourth restructuring in three years. The Wall Street bank sunk billions into Marcus with Solomon dedicating his time since 2019 to developing a full-service digital bank.

“[Solomon’s] view was that … if we want to be the digital bank of the future and have tens of millions of customers on the Marcus platform, how could we not have a primary checking relationship with those customers?” a person familiar with the matter told the Financial Times in an Oct. 23 report.

In mid-December, it was reported that Goldman Sachs layoffs may reach as many as 4,000 employees, including hundreds of staff related to its retail banking business.