Goldman Sachs is still aiming to exit its partnership with Apple as losses continue to pile up. As detailed in a new report from The Wall Street Journal, Goldman Sachs will take a $400 million hit this quarter due to the struggles of its consumer business.
At a conference this week, Goldman Sachs CEO David Solomon stated that this $400 million loss stems from two main factors: the sale of its General Motors credit card partnership and the disposal of real estate loans. According to the report, the General Motors card business will be sold to Barclays, with around $2 billion in card balances.
In total, since the beginning of 2020, Goldman Sachs has lost over $6 billion before taxes on a significant portion of its consumer lending businesses, including its credit cards. As previously reported, several factors contribute to Goldman’s substantial losses associated with Apple Card, such as charge-off rates that are nearly double those of other credit cards.
Goldman Sachs had planned to utilize Apple Card to enhance its efforts to expand into consumer banking. However, over the years, the bank has decided to completely exit the consumer business, including consumer loans and other offerings.
Looking ahead, Goldman Sachs is still seeking to end its partnership with Apple, which encompasses the Apple Card and Apple Card Savings Account. Currently, the Apple Card credit card balances total $17 billion. The Wall Street Journal says that Goldman Sachs could face even greater losses when divesting from the Apple partnership compared to the losses from the GM sale to Barclays.
Last November, The Wall Street Journal reported that Apple had sent a proposal to Goldman to exit the contract within approximately 12 to 15 months. The current status of that proposal remains unclear. It has been previously reported that Goldman has engaged in discussions with American Express and Synchrony Financial regarding taking over the Apple Card business.
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