By Niket Nishant and Tatiana Bautzer
(Reuters) -Goldman Sachs Group Inc is exploring the sale of its Greensky fintech business, the bank’s CEO said on Tuesday, its latest move to scale down its retail ambitions.
Greensky, which facilitates home improvement loans to consumers, was acquired by Goldman in September 2021 in a $2.24 billion stock deal, which closed a year ago.
At the time, Goldman said it expected “significant growth” from combining GreenSky’s products with those offered by its Marcus digital bank.
On Tuesday, Goldman shifted gears.
GreenSky is a “good business” that is performing well, Goldman CEO David Solomon told analysts after the company reported first quarter earnings that sank 19%.
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“Given our current strategic priorities, however, we may not be the best long-term holder of this business,” he said, referring to Goldman’s decision to step back from the consumer business.
Goldman booked a $470 million loss on the sale of some Marcus loans, which dragged down first quarter results. It had announced intentions to sell parts of Marcus at an investor day in February.
Marcus was folded into the company’s merged asset and wealth management arm last year.
Revenue from Goldman’s newly-formed Platform Solutions unit, which houses transaction banking, credit cards and Greensky, rose to $564 million in the first quarter, more than doubling from a year earlier, even though it posted a net loss of $248 million as it set aside more money to cover losses from credit cards.
(Reporting by Niket Nishant in Bengaluru and Tatiana Bautzer in New York, additional reporting by Saeed Azhar; Editing by Shailesh Kuber and Deepa Babington)