Goldman Sachs Wants to Opt Out Of Consumer Lending - Including Apple Card, General Motors Card

Goldman Sachs Group Inc GS is reportedly reconsidering its venture into consumer lending, a move initiated by launching a joint savings account with Apple Inc AAPL. 

The bank is now facing internal dissent and operational challenges, prompting a reevaluation of this strategic direction.

The bank's change of heart stems from the operational and financial challenges encountered since the launch of the Apple credit card and other consumer lending products, The Wall Street Journal reports.

Goldman Sachs is selling GreenSky at a significant loss, a company it acquired just last year. The deal will result in a $(0.19) earnings per share impact on Goldman Sachs' Q3. 

The bank has also offloaded most of its portfolio of personal loans, marking a swift retreat from consumer lending.

Some senior figures within Goldman Sachs advocate for a complete exit from consumer lending, including discontinuing the Apple credit card and other products.

The consumer lending venture has not been as profitable as anticipated, with partners within the bank attributing the challenges to CEO David Solomon. 

Regulatory scrutiny and operational inefficiencies have compounded the bank's woes in this sector.

Goldman's partnership with Apple, mainly the credit card venture, is under review. Options under consideration include allowing Apple to assume a more significant role in collaborating or offloading the consumer products to American Express Co AXP.

The Consumer Financial Protection Bureau is investigating Goldman's credit card account management practices. The bank is also facing challenges with the billing process for the Apple card, leading to operational inefficiencies.

Goldman has been reallocating resources from consumer lending to Project Blue, an internal initiative to address regulatory issues. 

The bank's future in consumer lending remains uncertain, with the upcoming earnings report anticipated to provide more clarity.

Price Action: GS shares are trading higher by 0.68% to $311.40 premarket on the last check Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.