Goldman Sachs is mulling the sale of its buy now, pay later-based home improvement lender Greensky as it continues its retreat from the consumer finance market.
The Wall Street giant acquired Greensky for $2.24 billion in September 2021. Since inception, approximately four million consumers had financed more than $30 billion of commerce using the firm's instalment-based payments platform, which is currently online at a network of 10,000 US merchants.
At the time, Goldman CEO David Solomon said: “We have been clear in our aspiration for Marcus to become the consumer banking platform of the future, and the acquisition of GreenSky advances this goal. GreenSky and its talented team have built an impressive, cloud-native platform that will allow Marcus to reach a new and active set of merchants and customers and provide them with an expanding set of solutions.”
GreenSky is a "good business" that is performing well, Goldman CEO David Solomon told analysts after the company reported a 19% drop in first quarter earning, thanks in part to a $470 million loss on the sale of some Marcus loans.
"Given our current strategic priorities, however, we may not be the best long-term holder of this business," he said, referring to Goldman's decision to step back from the consumer business.
Goldman's began its retreat from the consumer market in October last year, when it hived off Marcus and folded it into an asset and wealth management division. In January it reported that its "Platform Solutions" unit, which houses the firm's transaction banking operations, credit cards and Greensky made a pre-tax loss of $1.2 billion in the first nine months of 2022.
Revenue from the unit rose to $564 million in the first quarter, more than doubling from a year earlier, but posted a net loss of $248 million as it set aside more money to cover losses from credit cards.
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