Goldman’s Marcus records $110 billion in deposits

Amid macro headwinds, Goldman Sachs‘digital banking is a work in progress.

And now, according to the company, Mark will be integrated into the company’s asset and wealth management unit. Separately, a new division will contain banking transactions and credit cards launched with Apple and General Engines.

The reorganization was announced on Monday evening (October 17), as the company seeks to reorganize its organization into three divisions – investment banking and trading, asset and wealth management and transaction banking – with the consumer banking arm Marcus retreating into the wealth unit.

As CEO of Goldman Sachs david solomon said during a earnings call, “The global economy continues to face significant headwinds. Inflation remains high. Central banks are raising interest rates at a pace not seen in decades. Meanwhile, stock markets are far recent highs Geopolitical instability and energy shocks are a constant concern, and [gross domestic product (GDP)] growth expectations are down. Many of these trends accelerated towards the end of the quarter. »

Company Tuesday (Oct. 18) compensation supplements showed that the consumer franchise, which includes Marcus, has seen $110 billion in deposits, as well as $19 billion in loans and has 15 million active customers.

Digging deeper into consumer and wealth management metrics, the company said its credit card-related lending was $14 billion, down from $12 billion in the second quarter and $6 billion a year ago. one year old. Meanwhile, installment loans were $5 billion, unchanged from the second quarter of 2022 and up from $3 billion a year ago. Retail banking revenue was $744 million, nearly double the rate seen last year.

Solomon noted on the conference call with analysts that the company’s new direct-to-consumer (D2C) strategy means that “we will focus on existing deposit customers and consumers the bank already has access to through channels such as than the workplace and personal wealth, rather than seeking to acquire customers on a large scale.

During the Q&A, and addressing Marcus specifically, management noted that the company is “deliberately positioning itself” to attract deposits but will not be a “price leader.”

With respect to loan loss anticipation, the company’s loan loss provision for the entire consolidated loan portfolio was $5.6 billion, compared to $3 billion in the third quarter. from last year. Goldman said in his general Press release that its provision for credit losses was $515 million for the third quarter of 2022, compared to $175 million in the third quarter of 2021 and $667 million in the second quarter of 2022.

Provisions for the third quarter of 2022, the statement said, “reflect consumer portfolio growth, net charges and the impact of ongoing general concerns on the macroeconomic outlook.” And during the call, the CFO Denis Colman says that “where [we’re] With some signs of credit deterioration and an increase in charges, our credit performance remains in line with our expectations. »

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