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Goldman Sachs appears ready to ditch its ambitions to create a mass-market digital bank, as mounting losses at Marcus force the bank into a retreat.
Goldman Sachs’ consumer business is set to lose $1.2 billion this year. This is despite the fact that the bank presented investors and analysts with a chart in early 2020 suggesting that the business would break even in 2022.
By offering market-beating interest rates for savings, Marcus has so managed to attract 13 million customers for the unit, with deposits of more than $100 billion.
In an earning call six months ago, Goldman made bullish noises about prospects at Marcus as it laid the ground for the rollout of its first checking accounts.
According to Bloomberg, however, Marcus chief David Solomon is reportedly ready to pull the rug on the business, redistributing its products to its wealth and asset management businesses.
Checking accounts will now be offered only to select high net worth customers as well as to employees at corporate partners instead of to the mass market. The bank’s robo-adviser, Marcus Invest, is also being reserved for elite customers, as are Goldman’s savings accounts, Bloomberg reported.
Financial Services
