Goldman Sachs (NYSE:GS) is preparing to draw a line under its beleaguered consumer arm after investing and losing billions of dollars.
David Solomon, the US bank’s chief executive, said it is considering "strategic alternatives" for its consumer arm at an investor day.
Digital bank Marcus has a loan portfolio of US$4.5bn, which might be sold said analysts, while the bank’s credit card and point-of-sale operation might also go.
Marcus has a big customer base in the UK, with a reported 500,000 customers signing up since its launch in 2018.
At one point in 2021, it had to close its UK application list as demand for an account was so strong the bank was in danger of breaching the £25bn limit where it would have had to ring-fence the deposits in a separate entity to its investment bank.
The consumer business, now part of the bank’s asset and wealth management arm, had also been a key plank of Solomon’s strategy for Goldman Sachs (NYSE:GS) but mounting losses have seen investors call him to account over how long the experiment would last.
Losses at Marcus and the credit card business have totalled almost US$3bn in three years and at a time when the bank’s merchant banking and trading arms are also under pressure, their future has increasingly been questioned.
Stephanie Cohen, global head of Platform Solutions, said she expects the division to break even by 2025 but through growth in fees from asset and wealth management and in fintech.