But in recent months, Goldman has signaled a partial retreat from those efforts by scrapping plans for a checking account broadly available to the public and mothballing its personal loan business. A popular savings account and a credit card business survive for now.
Last week, the bank disclosed that it had accumulated $3 billion in losses in its consumer banking franchise since 2020, mostly money set aside to cover potential loan losses in its consumer lending businesses. Bank regulators are reportedly looking into whether the consumer business had proper safeguards in place as it grew larger.
The retreat in consumer banking comes as Goldman tries to refocus on its roots: advising corporations on deals, investing, and trading, and servicing the well-to-do. The firm's revenue from investment banking, trading, and wealth management made up two-thirds of total revenue last year.
"I think it became clear to us early in 2022 that we were doing too much, it was affecting our execution," said David Solomon, Goldman's chairman, and CEO, in a call with analysts when the bank reported its results earlier this month.
Goldman's push into consumer banking was one of the biggest changes in the firm's 154-year history. The investment bank had to legally convert itself into a bank holding company in 2008 during the financial crisis to get access to the Federal Reserve's emergency funding operations. That led to jokes within the industry that the Wall Street titan Goldman Sachs was going to issue something as commonplace as an ATM card.
The jokes became a reality when Goldman bought the assets of GE Capital and launched its online-only savings account providing an above-market interest rate. The savings account became an unexpected hit for Goldman, with waiting lists forming after its initial launch both in the U.S. and later in the U.K.
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