Goldman's Card Balances Up 11% as Management's ‘Pleased' With Credit Performance

Core Insights - Goldman Sachs is continuing its transition away from Main Street banking, highlighted by the sale of its GreenSky assets and the divestiture of Marcus loans [1] - The company has reached an agreement with Betterment to transfer Marcus Invest's digital investment accounts, excluding other assets and operations [1] Financial Performance - Transaction banking and corporate treasury revenues decreased by 15% to $70 million, attributed to lower client balances [2] - Credit card balances increased by 11% year-on-year to $19 billion, with management expressing satisfaction with card performance despite a consistent charge-off rate of 8.4% for consumer loans [2] - Consumer platforms within the platform solutions segment achieved 4% revenue growth to $599 million, driven by higher average credit card balances, although results were impacted by the GreenSky transaction [2] Growth and Projections - Growth in the card business has slowed due to multiple rounds of underwriting adjustments, with expectations for muted period-over-period growth [3] - The overall provision for credit losses decreased by 27% year-on-year to $395 million, reflecting stable performance in the card business [3] - CEO David Solomon indicated that the rise of artificial intelligence (AI) will create significant demand for infrastructure and financing, potentially boosting activity across the company's operations [3] Lending Activity - Goldman Sachs is integrating leveraged finance with its direct lending private credit platform, anticipating a favorable environment for refinancing and recapitalization over the next three to five years [4]