The media reported that in the future, Goldman Sachs may decide to sell its personal finance management business.
Abandoning the mentioned business is a logical and largely natural step in the framework of the gradual withdrawal of a financial institution from retail banking. At the same time, the lender stated that opportunities for investing in this segment are currently being fixed, but with less strategic impact on GS.
Also, at present, the financial institution is evaluating alternative options for the mentioned business as part of an assessment of the most promising investment areas that provide the greatest opportunities. The Bank strives to achieve the results that will be most beneficial for both the lender’s clients and its consultants.
Goldman Sachs states the financial management business is a minor part of its overall wealth management franchise, with $1 trillion in assets under surveillance.
A spokesman for the financial institution said that the lender sees the greatest opportunities in terms of the prospects of investment activity in the field of private banking and lending, as well as in the online bank Marcus Savings.
Last month, during an earnings call, Goldman Sachs CEO David Solomon announced the financial institution’s desire to narrow consumer ambitions due to the intention to focus on market operations and traditional investment banking.
The revenue of the lender’s consumer platforms division in the second quarter of this year was fixed at $577 million. This figure is 18% higher than the revenue recorded for the first quarter of 2023 and shows an increase of 129% compared to the result of a year ago. The financial institution’s reserve to cover credit losses in this segment in the second quarter of this year amounted to $544 million. This figure is more than 100% higher than the amount of funds recorded a quarter earlier, and increased by 75% compared to the same period last year.
The departure of a financial institution from retail banking occurs at a time when many lenders are stepping up their activities of serving the wealthiest groups of customers. For example, there is J.P. Morgan Chase 23 Wall, a family office in which approximately 30 employees serve 700 families with funds totaling more than $4.5 trillion.
As we have reported earlier, Goldman Sachs Reportedly Tries to Bail on Apple Card.