Goldman Sachs plots reorganisation, reveals change of plans for Marcus

Goldman Sachs is folding its digital bank offering Marcus into its wider asset and wealth management division as the firm shifts its focus away from its retail banking proposition.

Goldman Sachs CEO David Solomon

Marcus has $110 billion worth of digital deposits and approximately 13 million customers, but Goldman’s consumer business could make a loss of around $1.2 billion this year.

As part of a broader reorganisation, Goldman will look to slim down its operations to focus on three divisions: trading and investment banking, asset and wealth management, and a third division including transaction banking and other partnership operations including those with Apple.

In a conference call outlining the bank’s Q3 2022 results, Goldman chair and CEO David Solomon says organising the firm this way makes it easier for investors “to understand and see how we look at our client set and how we operate against our client set”.

“That’s what the big business is, banking and markets, and asset and wealth management,” Solomon adds, with the reorganisation reflecting the lessons learnt from launching the full-scale digital bank in 2016.

“When I look at the deposit platform that has been built, I think that what we have learned is that the ability to scale that and attract customers means the direct-to-consumer business needs to be focused in a more directed way.

“We’re focusing it by aligning it with our wealth business. We have access to millions of people and with it being aligned with our wealth business, we can offer this very interesting digital business to our customers,” Solomon says.

In an interview with CNBC, Solomon gave some more insight into the decision to reprioritise.

“The concept of being broad, with a consumer footprint, is not really playing to our strength. But when you look at our wealth platform, where we have access to millions of individuals, the ability to add banking services to that and align with that actually plays to our strength,” Solomon says.

On whether the Marcus brand itself will survive, Solomon is cagey.

“We’re moving in a direction of really amplifying Goldman Sachs,” Solomon says, and while Marcus has some brand identity and the bank is going to continue to work on its deposit platform, “we’re going to continue to offer these banking services adjacent to our wealth platform”.