Goldman Sachs to stop making unsecured consumer loans: source

GOLDMAN Sachs Group plans to stop originating unsecured consumer loans, a source familiar with the move told Reuters on Monday (Dec 12), in another sign the bank is stepping back from its consumer business.

The move came after Goldman signalled it was scaling back its ambitions for Marcus, the loss-making consumer unit, in October. Marcus was moved into the bank’s wealth management arm as part of a reorganisation of the company’s main business units.

The move on unsecured loans, which was first reported by Bloomberg on Monday, was reported alongside news that the bank plans to cut at least a few hundred more jobs, citing people familiar with the matter.

A Goldman Sachs spokesperson declined to comment.

The company might prune headcount if the business environment becomes tougher, chief executive officer David Solomon said in an interview on Bloomberg TV last week.

The firm cut around 500 jobs in September, an early signal to Wall Street that economic conditions were worsening.

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Goldman launched Marcus in 2016 as an online platform offering personal loans and savings accounts to retail clients. While Marcus was launched to woo mass market customers, it struggled to gain traction or introduce a checking account.

The business attracted US$110 billion in deposits, made about US$19 billion in loans and had more than 15 million active customers, according to the company’s third quarter earnings. The online savings account offers an interest rate of 3 per cent, according to Marcus’ website.

Goldman will also stop beta testing for its checking account among employees, the source said. But the savings account will continue to exist because it is an important source of funding for the firm, the source added. REUTERS