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Goldman Sachs folds Marcus into wealth management unit

Goldman Sachs folds Marcus into wealth management unit

Goldman Sachs is retreating from its push into retail banking, folding digital unit Marcus into its asset and wealth management division as part of a wider reorganisation.

In an interview with CNBC, the Wall Street giant's boss David Solomon said that placing Marcus within the wealth management business is a "better place for us to be focused than to be out massively looking for consumers".

Solomon admitted: "The concept of really being broad with a consumer footprint is not really playing to our strengths. But when you look at our wealth platform...the ability to add banking services to that and align it with that actually plays to our strength."

Launched in 2016, Marcus has so far managed to attract 13 million customers, with deposits of more than $100 billion.

However, the consumer business is set to lose $1.2 billion this year. This is despite the fact that the bank presented investors and analysts with a chart in early 2020 suggesting that the business would break even in 2022.

The bank is now set to refocus on its traditional strengths, reorganised into three division: the asset and wealth management unit, a trading and investment banking business, and a platform solutions division housing retail operations such as the Apple credit card and transaction banking.

Goldman saw third quarter net income of $3.1 billion, down from $5.4 billion a year ago but ahead of analyst estimates.

Comments: (1)

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 19 October, 2022, 13:30Be the first to give this comment the thumbs up 0 likes

With 13M customers and $100B deposits, Marcus is one of the most successful neobanks ever. However, being a division of a bank, it needs to operate according to the traditional PLBS business model, and therefore cannot make losses for too long. This is unlike fintechs, which are VC backed, and are under no pressure to make profits in the short, medium or (lately) even long term.

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