Goldman Sachs Ends Partnership with Apple Amid Consumer Banking Shift

Goldman Sachs has been scaling back its consumer banking operations, which included partnerships with companies like Apple and GM. Despite efforts to target the mass affluent market, the consumer business was still operating at a loss by August 2022. In response, Goldman restructured its operations by combining asset and wealth management into one segment and separating investment banking and trading into another. This restructuring was aimed at refocusing on its core businesses. In November, Goldman reached an agreement with GM to find a new issuer for their credit card, indicating a shift in strategy. Reports suggest that JPMorgan Chase is in discussions with Apple to take over its credit card program, which could lead to Goldman eliminating its platform solutions. Analysts believe that if Goldman exits both the Apple and GM card partnerships, it could help the bank avoid complications in the upcoming federal stress tests. The potential sale of the Apple credit card portfolio, valued at approximately $17 billion, is seen as a strategic move for Goldman. However, analysts have raised concerns about the exit costs, which could range from $500 million to $4 billion. A payment exceeding $1 billion could be perceived negatively, especially if Goldman believes the card portfolio is nearing breakeven. Overall, the developments reflect a broader trend of Goldman Sachs moving away from consumer banking, which has been characterized by challenges and losses. The bank's focus is shifting back to its traditional strengths in global banking and markets, as well as asset and wealth management, in an effort to stabilize and enhance its financial performance.