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Goldman Sachs in talks with Barclays to take over GM credit card business: WSJ

By Steve Gelsi

General Motors credit-card program has $2B in outstanding balances, with deal possible this summer

Goldman Sachs Group Inc. is in talks with Barclays about transferring its General Motors credit-card business as it continues its move away from the consumer lending business, The Wall Street Journal reported Tuesday.

Citing unnamed people familiar with the situation, the report said Barclays (BCS) has emerged as a leading candidate to take over the roughly $2 billion of balances for the Goldman Sachs (GS) GM credit card.

Bread Financial Holdings (BFH) and U.S. Bancorp (USB) were also engaged in talks with Goldman Sachs but appear to be less likely suitors at the current time, the report said.

A Goldman Sachs spokesperson declined to comment.

Goldman Sachs may reach a deal by the summer, but there's no guarantee that an agreement will be reached with Barclays, which bid on the business in 2020 but lost to Goldman.

Goldman Sachs has already said internally that it plans to exit the GM credit-card alliance, while unwinding its credit-card program with Apple Inc. (AAPL).

Last year, Goldman Sachs said it was pulling back from its consumer-facing banking businesses as it reorganized into three major units: Global Banking & Markets, Asset & Wealth Management, and Platform Solutions, which houses its consumer businesses.

Platform Solutions has lost about $6 billion, pretax as of the first quarter, starting from January, 2020.

In October, Goldman Sachs sold its GreenSky consumer-lending unit to a private-equity consortium led by Sixth Street.

The WSJ reported at the time that Goldman got about $500 million for GreenSky, less than a third of the $1.7 billion the bank paid for the business in 2021.

For its part, Barclays has been talking about growing its U.S. credit-card business through co-branded partnership, as part of a fresh emphasis on household and business lending.

Goldman Sachs executives have been frustrated that GM car dealers have not been promoting the credit-card more aggressively, the report said.

Co-branded credit-cards are also facing competition from travel rewards, which remain more in favor with consumers currently, the report said.

Also read: Goldman Sachs sheds GreenSky lending platform but still faces lack of low-cost deposits, analyst says

-Steve Gelsi

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04-30-24 0817ET

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