Goldman Sachs Doubles Down on Efforts to Attract Super-Rich

Goldman Sachs is reportedly increasing its efforts to court ultra-rich clientele.

The banking giant has been more focused on lending to private wealth customers — those with an average of $60 million deposited, The Wall Street Journal (WSJ) reported Sunday (Jan. 14).

In addition, the report said, loans to clients such as hedge funds are on pace to generate the highest revenue for Goldman’s trading partners in at least three years.

All told, Goldman’s loans and lending commitments outstanding, not including consumer, came to $327.5 billion at the end of the third quarter, around a third more from the same quarter in 2020, WSJ said.

According to the report, Goldman is seeking ways to diversify its revenue as it moves away from its consumer lending business. The bank is set to report earnings Tuesday (Jan. 16), the report said, highlighting non-consumer lending growth amid a larger downturn in dealmaking.

“This one is particularly strategic,” Nishi Somaiya, global head of private banking and lending, told WSJ in reference to the bank’s efforts to lend more to the ultrarich. “It hits all the things that are really important to us.” 

The report said that the bank’s revenue from private banking and lending to wealthy clients rose 12% during the first nine months of last year from the same period the prior year. And equities financing revenue for the first nine months was higher than the same period in the previous three years.

Goldman’s shift away from consumer lending last year was marked by its moves to exit its credit card partnerships with Apple and General Motors, and its sale of the GreenSky consumer finance platform and the loans associated with it.

“This transaction demonstrates our continued progress in narrowing the focus of our consumer business,” said David Solomon, chairman and CEO of Goldman Sachs, noting that while GreenSky was an attractive business, the bank wanted to focus its efforts on global banking, and its markets and asset/wealth management operations.

PYMNTS wrote in the days after the news of the sale that the deal provided “evidence of just how bumpy a road can be in building out new business lines that promised to digitize and modernize lending and payments.”