Goldman Sachs Wants Out of the Apple Card Business, Report Claims

Goldman Sachs’ third-quarter earnings may be the final straw for the Apple Card as the Wall Street giant faces internal pressure to exit the consumer-lending space. The Apple partnership has long been seen as a distraction from Goldman’s core business, the Wall Street Journal reported Monday. In regards to the recently launched Apple savings accounts, a Goldman partner told colleagues, “We should have never done this f—ing thing.” (censorship the Journal’s)

Goldman is under stiff pressure to cut losses as analysts expect the bank’s profits to be significantly down for the quarter. Apple’s products with the bank may be on the chopping block if earnings are as bad as expected. Senior executives want out of the consumer lending space, sources told the Wall Street Journal, and Apple’s financial products could be offloaded onto another bank – possibly American Express.

Goldman’s stock is down 11% in 2023, but the entire banking industry has been in the dumps this year. An index for America’s largest banks fell 24% in 2023 due to regional bank collapses, higher interest rates, and increased regulation, while the S&P 500 has risen 14%.

In October 2019, Goldman Sachs CEO David Solomon called the Apple Card’s rollout “the most successful credit card launch ever.” Apple’s Tim Cook said around the same time that the card would be “the most significant change in the credit card experience in 50 years.”

The tone has certainly shifted, and many Goldman executives are questioning whether the foray into consumer banking should have ever happened. The partnership between the two powerhouses of Silicon Valley and Wall Street, once lauded as innovative, is now one of the most scrutinized decisions in Solomon’s career.

David Solomon at a tech conference hosted by Kara Swisher.

The one thing keeping Apple around at the infamous Wall Street institution is the high-yield Apple savings accounts launched a few months ago. These accounts were, and remain, wildly popular, attracting billions of deposits that Goldman can’t afford to part with. If Goldman were to step back from the Apple deal, the bank could be forced to raise expensive capital in a short period of time.

Solomon’s partnership with Apple follows suit with the rest of his tenure. The flashy CEO faced intense scrutiny among Goldman partners for his focus on consumer lending and lack of focus on traditional staples of the banking business. Partners privately called for the ousting of Solomon altogether. Goldman Sachs recently sold Green Sky, another consumer lending platform touted by Solomon, at a steep discount to what it purchased the fintech company for last year.

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