Goldman Sachs Group Inc (GS.N) intends to stop originating unsecured consumer loans, a source conversant with the move told reporters on Monday, in another sign the bank is pulling back from its consumer business.
The move came after Goldman indicated it was reducing its ambitions for Marcus, the loss-making consumer unit, in October. Marcus was moved into the bank’s wealth management division as part of a restructuring of the company’s core business units.
The move on unsecured loans, which was initially reported by Bloomberg on Monday, was reported together with news that the bank plans to lay off at least a few hundred more employees, citing people with knowledge of the matter.
A Goldman Sachs spokesperson would not comment.
The company might cut headcount if the business environment becomes more unfavorable, Chief Executive Officer David Solomon said in an interview on Bloomberg TV a week ago. The firm axed around 500 jobs in September, an early warning to Wall Street that economic conditions were worsening.
Goldman set up Marcus in 2016 as an online platform giving personal loans and savings accounts to retail clients. While Marcus was set up to attract mass-market customers, it struggled to gain traction or open a checking account.
Buy Bitcoin NowThe business brought in $110 billion in deposits, made roughly $19 billion in loans, and had over 15 million active customers, according to the company’s third-quarter earnings. The online savings account charges an interest rate of 3%, according to Marcus’ website. Goldman will also end beta testing for its checking account among staff, the source said. But the savings account will remain in existence because it is a key source of funding for the firm, the source added.
