Goldman Sachs (NYSE:GS) is exploring the option of exiting its General Motors (NYSE:GM) credit card business, the Wall Street Journal reported. Per the report, Goldman could transfer its GM credit card program to Barclays (NYSE:BCS) (GB:BARC).
The move reflects the financial services giant’s efforts to scale back its consumer lending business, which has been unprofitable so far.
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The collaboration between Goldman Sachs and General Motors to introduce co-branded credit cards began in 2022 but failed to gain traction with new users. Goldman Sachs executives have expressed their dissatisfaction with what they see as inadequate promotion of the card by GM car dealers.
The GM co-branded credit cards were part of Goldman’s Platform Solutions unit, its consumer lending business that has faced significant challenges and incurred substantial losses. For instance, in 2023, 2022, and 2021, the Platform Solutions division reported net losses of $1.75 billion, $1.67 billion, and $0.84 billion, respectively.
In response to these difficulties, Goldman Sachs’ executives have been pushing for the company’s exit from consumer finance services. Previously, it sold off its specialty lending arm, GreenSky, and is now unwinding its credit card partnership with Apple (NASDAQ:AAPL).
Is Goldman Sachs a Buy or Sell?
Goldman Sachs stock is up about 12.5% year-to-date. Wall Street analysts are upbeat about its prospects.
Goldman Sachs stock has 17 Buys and three Holds for a Strong Buy consensus rating. Analysts’ average price target on GS stock is $453, which implies 5.15% upside potential from current levels.
