• Apple partnership draws criticism from Goldman Sachs insiders
• Rumors about the end of the partnership are circulating
• Goldman Sachs is struggling with a decline in profits
Goldman Sachs partner criticizes Apple savings accounts
The Apple Card was introduced in collaboration with Apple in 2019. Last April, the partnership between Goldman Sachs and Apple deepened again when it announced the launch of savings accounts for Apple Card users. However, as Business Insider reports with reference to the Wall Street Journal (WSJ), it shows what US bank insiders really think of the partnership with the US tech giant. “We should never have done this damn thing,” an unnamed Goldman partner told other bank employees when discussing Apple’s introduction of savings accounts. Other insiders are said to have the same opinion, as the report shows. The foray into the private customer market caused the bank billions in losses. However, the first unrest began in July this year when reports emerged that Goldman Sachs was considering outsourcing its partnership with Apple>.
Is Goldman Sachs ending the partnership?
The Wall Street Journal and, a little later, CNBC reported in July that Goldman Sachs was considering exiting the Apple partnership. Specifically, the US bank is in exchange with American Express about shifting Apple credit cards and savings account products to the US credit card group. There were also reports that Goldman Sachs might also want to withdraw from its card partnership with General Motors. However, Goldman Sachs CEO David Solomon also stated in the summer: “We’ve also been very clear that our credit card partnerships are long-term partnerships… They can definitely work better. We’ve been working hard to improve operations… we’re making good progress on that “And we’re working with Apple and also with GM to achieve that,” said the company’s CEO, according to Business Insider. Neither Apple nor Goldman Sachs reportedly responded to a request from Business Insider for comment on the latest WSJ report. It remains to be seen what will really happen with the partnerships.
Goldman Sachs reports weak quarter
At the same time, the pressure on Solomon and the US bank is growing. Goldman Sachs recently reported a significant drop in profits in the last quarter. In the third quarter, the bank wrote off a loss of about $500 million for its Greensky subsidiary, which it sold to a consortium led by investment firm Sixth Street. Goldman Sachs only acquired Greensky last year. However, the company’s previous attempt to gain a foothold in the mass consumer business was not successful. CEO Solomon is now turning away from this strategy.
In the last quarter, Goldman Sachs also struggled with declining revenue and significantly increased costs. Due to a nearly 25 percent decline in net interest income, the bank’s total revenue fell 1 percent to $11.8 billion. In addition, personnel expenses rose by 16 percent.
Editorial team finanzen.ch