Goldman Sachs’ new fintech unit racked up staggering £2.5bn loss since 2020
Goldman Sachs’s new fintech unit, Platform Solutions, lost $3bn (£2.5bn) since 2020 according to earnings reports republished by the bank on Friday.
Platform Solutions – a new unit housing fintech and many of Goldman’s consumer banking products such as the Apple Card and Greensky – was announced as part of restructuring plans in October.
To help investors evaluate the unit’s performance in the new year, Goldman refiled earnings reports dating back to 2020 reflecting the restructuring plans.
In the first nine months of 2022, the unit reported a loss of $1.2bn with its losses growing every quarter.
In 2021 it lost $1bn while in 2020 it lost $783m. Bloomberg reported that, including fourth quarter results, which will be published next Tuesday, total losses in Platform Solutions will be close to $4bn since 2020.
This is the most detailed set of information about the new unit. While Goldman had previously admitted it was lossmaking, it had not published any profit or loss numbers.
The figures will raise concerns about the future of the unit, which was intended to diversify Goldman’s operations from its traditional strengths of investment banking and trading.
No information was released about Marcus, the lossmaking consumer banking arm which was incorporated into an asset and wealth management business under the October restructuring plans. Goldman’s foray into consumer banking has so far proved expensive without generating significant returns.
The bank is embarking on a massive cost-cutting programme. This week it cut 3, 200 jobs, one of the largest redundancy programmes in its history.
The restructuring and the redundancies reflects CEO David Solomon’s concern to secure a higher valuation as many investors remain concerned that revenue in investment banking and trading – the bank’s dominant source of revenue – is too volatile.