Goldman confirms it is investigating the sale of fintech GreenSky

Dive card:

• Goldman Sachs wants to offload GreenSky, the installment loan fintech it bought for $2.24 billion last year, CEO David Solomon analysts said Tuesday.
• The comments add more structure to Salomon’s claim, during the bank’s investor day in February, that Goldmans is “assessing strategic options” for its consumer business.
• Goldman acquired Atlanta-based GreenSky in a stock deal in March 2022 in an attempt to combine the firm’s products with the Marcus consumer banking platform.

Diving Insights:

After closing last year’s GreenSky deal, Solomon called fintech a “key component” in helping the firm “build the consumer banking platform of the future.”

At the time, Goldman said it aimed to give its consumer banking clients a buy-now, pay-later option to borrow for one-time purchases, such as home improvement projects and health care expenses.

But losses at Marcus, combined with the bank’s concerted effort to pull back from the consumer market, mean GreenSky may no longer have a place in Goldman’s portfolio.

Solomon told analysts Tuesday that the bank sold $1 billion of its Marcus loan portfolio and put the rest up for sale — a move he described as “an example of us narrowing our focus in the consumer space.” This move came at a loss of $470 million for the New York City-based bank.

“Additionally, we are now starting the process to explore the sale of GreenSky,” Solomon said.

Solomon described fintech as “a good business” that is “performing well”.

“Given our current strategic priorities, however, we may not be the best long-term holder of this business,” he said.

The decision to sell GreenSky follows a major reorganization the bank underwent in October, when it folded its expanded asset management and private wealth operations into one unit.

As part of the restructuring, aimed at reducing customer acquisition costs, Goldman split its consumer platform Marcus into two groups.

The platform’s consumer-focused operations were moved to Goldman’s asset and wealth management unit, while a subset of Marcus’ business dealing with corporate clients became a standalone unit called Platform Solutions. GreenSky is currently based there.

Meanwhile, Goldman seems content to invest in reaching the consumer market indirectly, via its Apple partnership.

In a bond that further deepens the bank’s relationship with the technology giant, the companies launched a high yield savings account Monday for Apple card users.

The account offers an annual percentage rate of return of 4.15%, with no fees, no minimum deposit and no balance requirements, Apple said.