Banks | Goldman Sachs’ consumer business generated losses of three billion dollars in less than three years

American In 2016, the major bank Goldman Sachs entered the consumer market with big plans. The new digital bank called Marcus offered savings accounts, credit cards and loans to individuals. The purpose was to build a bank of the future that would become the market leader in the industry, describes the American media Bloomberg.

However, the end result has not been glamorous for Goldman Sachs.

The consumer business has suffered large losses in recent years. New information about them was obtained when Goldman Sachs published more detailed figures for its consumer business for the first time on Friday. They talk about it, among other things Bloombergnews agency Reuters and a financial magazine The Wall Street Journal.

In October, Goldman Sachs said it was reorganizing its organization. At that time, the company gathered consumer business activities into a new department called platform solutions (“platform solutions” in Finnish).

In the first nine months of last year, these businesses posted losses of $1.2 billion (about 1.1 billion euros), according to Bloomberg. The loss was even more in each quarter than the previous one.

From the beginning of 2020 until the end of last September, the operations in question had made a total loss of three billion dollars, which corresponds to approximately 2.8 billion euros.

Goldman Sachs the consumer business was originally supposed to become profitable at the end of last year, Bloomberg says.

Platform solutions -segment executives now predict that the segment could become profitable at some point in 2025, but a final target has not yet been set, Bloomberg’s sources say.

The Marcus digital bank has been a part of the CEO of Goldman Sachs, which started in 2018 by David Solomon a strategy aimed at increasing Goldman Sachs’ foothold in retail banking.

Under Solomon’s leadership, Goldman Sachs has invested significantly in Marcus. Still, it has suffered from technical challenges and its market share has remained quite small.

Goldman Sachs has previously said that the digital bank’s turnover in 2021 was almost 1.5 billion dollars and that it expects the turnover to increase to more than 4 billion by the end of 2024.

Reuters said earlier this month that Goldman Sachs’ head of consumer banking Swati Bhatia leave his job.

Bloomberg asks whether Goldman Sachs is under even more pressure to divest from loss-making operations now that the numbers are more visible to shareholders.

At least the company is introducing other means to reduce costs. Recently was reportedthat Goldman Sachs is planning large-scale layoffs, in which more than 3,000 employees would be fired.

In the stock market The figures published by Goldman Sachs on Friday were received calmly.

Jättipanki’s share was up about 0.8 percent on Friday around 20:30 Finnish time.