David Solomon, chief executive officer of Goldman Sachs Group Inc., during a Bloomberg Television on the Goldman Sachs Financial Services Conference in Recent York, US, on Tuesday, Dec. 6, 2022.
Michael Nagle | Bloomberg | Getty Images
Goldman Sachs said Wednesday that it agreed to sell its fintech lending platform GreenSky to a bunch of investors led by private equity firm Sixth Street.
The deal, which incorporates a book of loans created by Goldman, will end in a 19 cents per share reduction to third-quarter earnings, Goldman said within the statement. The Recent York-based bank is scheduled to disclose results Tuesday.
The move is the most recent step CEO David Solomon has taken to retrench from his ill-fated push into retail banking. Under Solomon’s direction, Goldman acquired GreenSky last yr for $1.7 billion, overruling deputies who felt the house improvement lender was a poor fit. Months later, Solomon decided to seek bids for the business amid his broader move away from consumer finance. Goldman also sold a wealth management business and was reportedly in talks to offload its Apple Card operations.
“This transaction demonstrates our continued progress in narrowing the main focus of our consumer business,” Solomon said in the discharge.
The bank is now focused on its core strengths in investment banking and trading and its push to grow asset and wealth management fees, he added.
Goldman will proceed to operate GreenSky until the sale closes in the primary quarter of 2024, the bank said.
The expected hit to third quarter earnings includes expenses tied to a writedown of GreenSky intangibles, in addition to marks on the loan portfolio and better taxes, offset by the discharge of loan reserves tied to the transaction, Goldman said.
It follows a $504 million second-quarter impairment on GreenSky disclosed in July.
The Sixth Street group includes funds managed by KKR, Bayview Asset Management and CardWorks, according to the discharge.
Private equity groups have played key roles in several of the banking industry’s asset divestitures for the reason that start of the yr, providing funding for the PacWest merger with Banc of California, for instance.
Read more: Goldman Sachs faces big writedown on CEO David Solomon’s ill-fated GreenSky deal