Report: Goldman Sachs Struggles as It Tries to Exit GM Card

Core Insights - Goldman Sachs reported significant losses related to its Main Street lending business, particularly from its General Motors credit card business, amounting to an estimated $400 million pre-tax hit [1] - The bank is moving away from the credit card lending space due to high charge-off rates and lax underwriting standards, as characterized by a recent Wall Street Journal report [1][2] - Goldman Sachs is facing challenges in its card partnerships, including a substantial $17 billion balance with Apple, indicating a broader struggle in its consumer banking strategy [2] Group 1 - Goldman Sachs is experiencing a $400 million pre-tax loss from the sale of its General Motors credit card business and another smaller unit [1] - The GM card partnership has approximately $2 billion in outstanding balances, with high charge-off rates contributing to the difficulties in selling the program [1][2] - The average charge-off rate for Goldman-originated accounts exceeds 10%, significantly higher than the 4.5% annualized rate for American commercial banks [2] Group 2 - Goldman Sachs has been shifting its focus towards investments and banking activities more aligned with market operations, moving away from Main Street banking [3] - The bank previously sold its GreenSky consumer finance platform, indicating a strategic pivot away from consumer lending [3]