Goldman Sachs delays credit card exit amid $400M losses

Goldman Sachs is facing significant financial challenges as it attempts to sell its General Motors credit card portfolio, anticipating a pre-tax loss of approximately $400 million. The bank has been negotiating with GM and Barclays for several months, but Barclays has expressed reluctance to meet Goldman's initial asking price due to high charge-off rates, which reflect the risk of borrowers defaulting on their debts. This situation has led to a decline in Goldman Sachs' stock price, which fell over 4% following the news. CEO David Solomon highlighted concerns about the bank's trading revenue, projecting a nearly 10% decline in the third quarter compared to the previous year. He also warned of subdued revenues in the asset and wealth management sectors. Since early 2020, Goldman Sachs has incurred over $6 billion in pre-tax losses from its consumer lending operations, prompting a strategic shift away from consumer finance in 2022 to refocus on investment banking and high-net-worth clients. The broader financial landscape has also been turbulent, with other major banks like JPMorgan Chase experiencing stock declines due to tempered forecasts on expenses and net interest income. This reflects a challenging environment for financial institutions as they navigate economic pressures and changing market conditions. As Goldman Sachs continues to grapple with these issues, the outcome of its credit card business sale remains uncertain, highlighting the ongoing difficulties faced by the bank in its consumer lending ventures and the impact on its overall financial health.