Will Goldman Sachs Continue its Push into Retail Banking?
Posted on 10/10/2022
Launched in 2016, Marcus by Goldman Sachs is a brand of Goldman Sachs Bank USA and Goldman Sachs & Co. LLC, which are subsidiaries of The Goldman Sachs Group, Inc. Marcus by Goldman Sachs is part of Goldman Sachs’ consumer business and is set to lose US$ 1.2 billion for 2022. A chart in early 2020 showed that the consumer unit would break-even in 2022. Furthermore, Marcus had a credit card loss rate of 2.93% in the second quarter of 2022. Marcus experienced recently high turnover of senior staff and stalled product rollouts.
Marcus was named after Marcus Goldman, the founder of Goldman Sachs. In 2017, Goldman Sachs acquired small business lender Bond Street. Marcus expanded geographically for the first time in
September 2018 with a launch in the United Kingdom.
Marcus offered interest rates that were a bit higher for savings accounts, which led to the unit attracting 13 million customers and deposits of more than US$ 100 billion. However, the costs incurred by Goldman is making the bank rethink its strategy and the bank could redistribute its products to its wealth and asset management groups.
Many large banks have pulled back from offering services to less-wealthier clients. Goldman Sachs is looking to offer their accounts to select high net worth customers as well as to employees at corporate partners instead of the general populace.
Marcus to be Swept in Asset Management and Wealth Unit
Goldman Sachs is planning a major reorganization, which includes a plan to likely combine its expanded asset management and private wealth businesses into one unit. Goldman Sachs will also merge its investment-banking and trading operations under one group. Marcus will be part of the asset- and wealth-management unit.