Goldman Sachs has lost $3.03 billion in nearly three years on its group of businesses, called Platform Solutions, that houses Apple Card. Bloomberg reports that the credit card made up a significant portion of those losses.
In a regulatory filing disclosed Friday, Goldman Sachs revealed that from the start of 2020 through the end of September 2022, Platform Solutions’ pretax losses amounted to $3.03 billion.
Sources with knowledge of the matter told Bloomberg that when the latest quarter’s figures are added, Platform Solutions’ is on track for a total three-year loss of $4 billion, with Apple Card making up more than $1 billion of that figure.
Sachs reported a pretax loss for its credit card division of over $1.2 billion for the first nine months of 2022 and a $1 billion pretax loss for 2021. Sources told Bloomberg the losses were “mostly tied to the Apple Card.” Meanwhile, it was also reported that of the roughly $2 billion of total losses in 2022, most stem from the Apple Card and fintech installment-lending platform GreenSky.
The losses stem from the vast investment that Goldman Sachs has funneled into Apple Card, estimated to be somewhere between $1 -3 billion, 9to5Mac reports. The bank had hoped for Platform Solutions to break even by 2022 but now that target has been shifted to 2025.
Amid the losses, it’s been reported that Goldman Sachs is also ready to shed 3,200 jobs, most of which will come from its trading and banking units.
And all of this comes as The Consumer Financial Protection Bureau (CFPB) is investigating Goldman Sachs’ card business. According to a regulatory filing filed August last year, the CFPB is investigating the “application of refunds, crediting of nonconforming payments, billing error resolution, advertisements, and reporting to credit bureaus.”
As CNBC reportedthose payment issues were down to the rapid take-up of the Apple Card which caused Goldman Sachs to struggle to deal with related customer service issues.