Goldman’s consumer retreat isn’t over

Goldman Sachs (GS) isn’t finished pulling back from consumer lending as it looks to cut costs and refocus on its core strengths.

The latest step involves a credit card it launched less than two years ago with General Motors (GM). GM has started the process of seeking a new issuer for the card, a person familiar with the situation confirmed with Yahoo Finance.

ANKARA, TURKEY - OCTOBER 20: In this photo illustration, a mobile phone screen displays logo of the Goldman Sachs Groups Inc. in front of a computer screen displaying the logo of General Motors Co. in Ankara, Turkey on October 20, 2020. (Photo by Muhammed Selim Korkutata/Anadolu Agency via Getty Images)

GM and Goldman launched a new credit card together in early 2022. (Muhammed Selim Korkutata/Anadolu Agency via Getty Images) (Anadolu Agency via Getty Images)

The Wall Street Journal was the first to report Tuesday that the bank told employees it had begun the process of seeking a new issuer for the GM credit card program.

The GM card, intended for consumers who own the company’s vehicles, is the second such card partnership Goldman has. It launched a similar card with Apple (AAPL) in 2019, and that partnership may also be nearing an end.

Read more: How to find the best rewards credit card for November 2023

The Journal reported that Goldman had held conversations with credit card giant American Express (AXP) to gauge its interest in taking over both the Apple and GM programs.

Goldman Sachs declined to comment.

The credit card discussions are part of a larger pullback from an ill-fated foray into consumer lending.

Goldman in late August announced it found a buyer for a personal finance unit catering to the mass affluent. Then in early October, it announced the sale of specialty lender GreenSky to Sixth Street Partners and a consortium of other firms.

Goldman is under pressure to improve its results. Its third quarter profits fell 33% from a year ago, the worst among big banks with sizable Wall Street operations.

It took charges that included a write-down on GreenSky, reducing pre-tax profits by almost $1 billion. The bank is also trying to recover from a prolonged slump in the dealmaking market.

David Solomon, Chairman and Chief Executive Officer of Goldman Sachs, speaks during the Global Financial Leaders' Investment Summit, in Hong Kong, China November 7, 2023. REUTERS/Tyrone Siu

David Solomon, CEO of Goldman Sachs, speaking earlier this week in Hong Kong. REUTERS/Tyrone Siu (Tyrone Siu / reuters)

“Our partnerships with Apple and GM are long-term contracts,” CEO David Solomon told analysts on the bank’s third quarter earnings call.

“And we don’t have the unilateral right to exit those partnerships, so our focus at the moment is on managing them better, getting rid of the drag, and bringing them to profitability, and we’re making progress,” he added.

David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto and other areas in finance.

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