Goldman Sachs still working to exit Apple Card partnership as consumer losses top $6 billion

Goldman Sachs is in a tough spot as it faces steep losses from its consumer business—especially its partnership with Apple. The Wall Street Journal reports that the bank is expected to take a $400 million hit this quarter alone, mainly from selling off its credit card partnership with General Motors and real estate loans. That GM deal is being passed over to Barclays, but it’s insufficient to stem the financial bleeding.

Since 2020, Goldman Sachs has lost over $6 billion pre-tax from its consumer-lending operations, which include credit card ventures like the Apple Card. While the Apple Card was supposed to help Goldman branch out into consumer banking, the plan hasn’t worked as intended. The card’s charge-off rates (when debts are unlikely to be paid back) are almost double what’s seen with other credit cards, adding to the bank’s financial woes.

Goldman Sachs has decided it’s done with consumer banking entirely, including its partnership with Apple. Apple Card balances currently stand at a hefty $17 billion, meaning Goldman Sachs could lose even more than it did with the GM card when the Apple deal is offloaded. So far, no one knows exactly how this breakup will end, but Goldman has been in talks with companies like American Express and Synchrony Financial about taking over.

As this chapter in Goldman’s consumer banking saga winds down, the future looks hazy. Last year, Apple proposed an exit plan to see Goldman out of the Apple Card business within 12 to 15 months, but it’s still unclear if that will happen. What is certain, though, is that Goldman’s leap into consumer banking didn’t pay off the way it had hoped, leaving the bank to figure out its next move…………[read more]

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What happens to the relationship between consumers and companies when a major financial partner like Goldman Sachs walks away from a popular product like the Apple Card?

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