Title: Goldman Sachs Faces Internal Pressure to Exit Consumer-Lending Space Amidst Apple Card Struggles
In a surprising turn of events, financial giant Goldman Sachs is reportedly facing increasing internal pressure to exit the consumer-lending space. The final straw may come in the form of the Apple Card, whose third-quarter earnings are expected to be disappointing. The partnership between Goldman Sachs and Apple, once regarded as innovative, is now under intense scrutiny.
The Apple partnership, which included the launch of Apple savings accounts, has been seen as a distraction by some Goldman partners who have expressed regret in its initiation. Analysts predict that the bank’s profits for the quarter will be significantly down, amplifying the pressure on Goldman Sachs to cut its losses.
Senior executives at Goldman Sachs are contemplating offloading Apple’s financial products onto another bank, with American Express being a potential candidate. This move may help the financial institution refocus on its core business while potentially salvaging their relationship with Apple.
Goldman Sachs’ stock has already taken a beating this year, plummeting by 11% in 2023. This decline reflects a challenging year for the entire banking industry, which has faced numerous obstacles and uncertainties.
The high-yield Apple savings accounts have emerged as the only saving grace for the partnership, as they have attracted billions of deposits. Goldman Sachs cannot afford to lose these deposits, which puts more pressure on the bank to reconsider its consumer-lending ventures.
Additionally, Goldman Sachs CEO David Solomon’s emphasis on consumer lending has faced severe criticism from partners, with some even calling for his ousting. This backlash further contributes to the internal turmoil at the organization.
To add to their challenges, Goldman Sachs recently sold Green Sky, another consumer lending platform, at a noticeable discount. This move underlines the financial institution’s struggle within this sector.
The future of the Goldman-Apple partnership remains uncertain as the bank grapples with mounting pressure to refocus on its core business. Although the partnership was initially deemed promising, its current state places it at a crossroads, leaving executives with difficult decisions to make.
As the world watches with bated breath, it remains to be seen whether Goldman Sachs will heed the internal pressure, rectify their consumer-lending ventures, and re-establish their dominance in the financial industry.
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