Goldman Considers Shrinking Its Consumer Business

“I’ve certainly reflected a lot over the course of the last three years,” he said, referencing the bank’s consumer businesses. “There were some clear successes, but there were also some clear stumbles.” 

Mr. Solomon didn’t immediately offer more details, though the language he used could suggest a sale of GreenSky or its card partnerships. Less dramatically, it could represent some kind of restructuring of the card agreements to make them more lucrative for Goldman, or allowing another bank to become an issuer alongside Goldman.  

Goldman is exploring alternatives while it works to make GreenSky and cards profitable. Should the latter occur, it is possible that Goldman wouldn’t go through with a sale or other change.

“We’re focused on profitability, the right strategy and will be nimble and flexible,” Mr. Solomon said. “We’ve significantly narrowed our ambitions for consumer strategy.” 

Goldman, the epitome of a Wall Street firm for generations, has been struggling with its foray into Main Street banking. In earnings results released in January, the bank disclosed that the Platform Solutions unit had lost $3.8 billion on a pretax basis since the start of 2020.

Goldman said Tuesday it aims to reach a pretax break-even in Platform Solutions by 2025. 

Platform Solutions includes GreenSky and the card partnerships—together called consumer platforms. It also includes another business called transaction banking, which provides payment services to banks and corporations. That unit is currently profitable, the company said. 

His statements were a marked departure from Goldman’s last investor day in 2020. Then, the firm said it was building a leading digital consumer bank that would address a range of consumer banking and borrowing needs.

The stakes are high for Mr. Solomon. Many investors have grown frustrated because they believe Goldman hasn’t offered enough clarity about what exactly it wants to be. Some think Goldman’s efforts were too ambitious for a bank that didn’t have consumer lending in its DNA. 

“It became clear that we lacked certain competitive advantages and that we did too much too quickly,” Mr. Solomon said Tuesday. 

The potential for a slowing economy, where overall delinquencies rise and banks have to set aside more money for bad loans, also helped convince Goldman to pull back. 

Goldman President

John Waldron

said Tuesday that consumer platforms are “weighed down significantly” by reserves and operating expenses. He said Goldman is focused on making “the right strategic decisions…to ensure we understand all opportunities to unlock value.”

Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com

“I’ve certainly reflected a lot over the course of the last three years,” he said, referencing the bank’s consumer businesses. “There were some clear successes, but there were also some clear stumbles.” 

Mr. Solomon didn’t immediately offer more details, though the language he used could suggest a sale of GreenSky or its card partnerships. Less dramatically, it could represent some kind of restructuring of the card agreements to make them more lucrative for Goldman, or allowing another bank to become an issuer alongside Goldman.  

Goldman is exploring alternatives while it works to make GreenSky and cards profitable. Should the latter occur, it is possible that Goldman wouldn’t go through with a sale or other change.

“We’re focused on profitability, the right strategy and will be nimble and flexible,” Mr. Solomon said. “We’ve significantly narrowed our ambitions for consumer strategy.” 

Goldman, the epitome of a Wall Street firm for generations, has been struggling with its foray into Main Street banking. In earnings results released in January, the bank disclosed that the Platform Solutions unit had lost $3.8 billion on a pretax basis since the start of 2020.

Goldman said Tuesday it aims to reach a pretax break-even in Platform Solutions by 2025. 

Platform Solutions includes GreenSky and the card partnerships—together called consumer platforms. It also includes another business called transaction banking, which provides payment services to banks and corporations. That unit is currently profitable, the company said. 

His statements were a marked departure from Goldman’s last investor day in 2020. Then, the firm said it was building a leading digital consumer bank that would address a range of consumer banking and borrowing needs.

The stakes are high for Mr. Solomon. Many investors have grown frustrated because they believe Goldman hasn’t offered enough clarity about what exactly it wants to be. Some think Goldman’s efforts were too ambitious for a bank that didn’t have consumer lending in its DNA. 

“It became clear that we lacked certain competitive advantages and that we did too much too quickly,” Mr. Solomon said Tuesday. 

The potential for a slowing economy, where overall delinquencies rise and banks have to set aside more money for bad loans, also helped convince Goldman to pull back. 

Goldman President

John Waldron

said Tuesday that consumer platforms are “weighed down significantly” by reserves and operating expenses. He said Goldman is focused on making “the right strategic decisions…to ensure we understand all opportunities to unlock value.”

Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com