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Goldman Sachs (NYSE:GS) is poised to offload a $2B portfolio of loans tied to General Motors (GM) customers to Barclays (NYSE:BCS) following its unsuccessful and costly venture into the credit card business, according to a Tuesday media report.
The sale is expected to run at a discount to the value of the outstanding balances, Bloomberg reported, citing people with knowledge of the matter.
The news comes after Goldman (GS) CEO David Solomon said the Wall Street giant is preparing to take a $400M pretax hit related to its costly exit from the consumer arena.
First pivoting away from its consumer business, Goldman (GS) eventually decided to nix it entirely. It was an expensive endeavor that saw it record billions of dollars in losses, and abandon other mass-market products like its financial planning unit, online lending service GreenSky, and its partnership with the Apple Card. That led to many questions about leadership, as well as effective collaboration and communication within the organization.
British bank Barclays (BCS), meanwhile, has pledged to expand its U.S. consumer credit-card business over the coming years, with hopes to boost assets tied to the segment by $10B in the years to come.
“We expected some of that to come from the growth in the existing stock,” Barclays CEO C.S. Venkatakrishnan said at a recent investor conference, Bloomberg reported. “We also said over a three year period you’ve got to assume that there may be one or two add-ons and maybe one subtraction in terms of accounts, that’s the normal way things are.”
