The push into private customer business has brought losses in the billions to the US bank Goldman Sachs. Is Goldman Sachs turning its back on its largely failed retail banking initiatives — and ending its partnership with Apple in the process?
• Introduction of the Apple Card 2019 – Companies have further deepened their partnership
• However, retail banking initiatives have largely failed
• Is Goldman Sachs now about to turn around?
Advance into the private customer market
In January, the major US bank Goldman Sachs announced that it had already burned billions with its push into the private customer market. The collection of businesses combined into the Platform Solutions division alone came up with a pre-tax loss of $1.2 billion in the first nine months of last year, the US investment bank said in a report to regulators. From the beginning of 2020 to the end of September 2022, the new segment’s pre-tax loss even amounted to up to 3 billion US dollars.
Companies have deepened partnership
The Platform Solutions division includes offerings such as Goldman’s Apple Card. In 2019, the iPhone manufacturer and the major US bank started to introduce the credit card – in April the two companies deepened their partnership and announced the introduction of savings accounts for Apple Card users. “This week we announced the launch of a savings account for Apple Card users. We’re excited to deepen our partnership with Apple through this additional offering and introduce another source of deposit funding for the company,” Goldman CFO Denis Coleman said, according to CNBC at that time. In October last year, Goldman Sachs CEO David Solomon announced that the partnership with Apple had been extended to 2029, reports Business Insider.
Moving away from retail banking initiatives?
However, these plans could now change: As the Wall Street Journal and later also CNBC reported last Friday, Goldman Sachs is considering withdrawing from the partnership with Apple. According to sources familiar with the matter, Goldman Sachs is in talks with American Express about moving Apple’s credit card and savings account products to the US credit card company. However, no agreement has yet been reached, so nothing is certain yet.
There are also reports that Goldman Sachs may also be looking to sever its card partnership with General Motors.
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