Goldman Sachs Posts Over $1 Billion in Apple Card Losses from January to September 2022

Goldman Sachs (NYSE: GS) lost $3.03 billion from January 2020 to September 2022 on its Platform Solutions division, the collection of businesses that includes Apple Card, according to filings submitted on Friday. 

Bloomberg reports that $1.2 billion in pretax losses from just the first three quarters of 2022 are attributed to the digital credit card partnership with Apple, Inc (Nasdaq: AAPL). The losses are believed to be largely due to loan-loss provisions for the Apple Card. These are the funds that a bank allots to cover loans — or in this case, credit card debt — that it deems are unlikely to be repaid.

When it was launched in 2019, the Apple Card was the bank’s golden entry into the consumer industry. CEO David Solomon called it “the most successful credit launch ever.” The original forecast was that the company’s consumer division as a whole would break even by the end of 2022, but that forecast has been delayed to 2025, with a final target yet to be set.

The card is offered with an array of ‘no fees’ benefits, e.g. no late fees, annual fees, international fees, and over-limit fees, further affecting the cash flow with fewer ways to pump up revenue. And while it’s great news for consumers, its “competitive” interest rate has also contributed to the deficit.

The New York-based firm, led by Solomon, is seeking ways to cut costs elsewhere. The firm is joining the trend of mass layoffs seen in major companies since 2022. They have moved to cut 3,200 jobs, one of its biggest rounds of cuts ever, in the second week of January. About one-third of the cuts will impact its core trading and banking units.


Information for this story was found via Bloomberg, Phone Arena, and the sources and the companies mentioned. The author has no securities or affiliations related to this organization. Views expressed within are solely that of the author. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Gold/Silver: People Can Still Lose Money In This Bull Market!? | Rick Rule

He Said $300 Silver!? | Peter Krauth

Dollar Will Collapse, Gold and Silver Are the Only Safe Havens | Jim Rogers

Recommended

Nova Scotia Bans Forest Access to Prevent Wildfires

Cardiol Therapeutics Releases Positive Topline Results From Phase II Clinical Trial

Related News

Goldman Sachs Sees High Yield Debt Default Rate Soaring to 13%; Fed to Buy upto $1.2T of Corporate Debt

In a note to clients, Goldman Sachs said their baseline scenario for high-yield debt sees...

Sunday, April 5, 2020, 02:09:56 PM

Copper, Gold To See ‘Immediate Price Boost’ From Potential Rate Cuts

Analysts at Goldman Sachs are projecting potential interest rate cuts by the US Federal Reserve...

Thursday, February 22, 2024, 02:14:00 PM

Galaxy Digital Conducts First OTC Crypto Trade with Goldman Sachs

Goldman Sachs for the first time ever conducted an over-the-counter crypto transaction with crypto financial...

Monday, March 21, 2022, 11:32:00 AM

Goldman Sachs Under Investigation Over SVB Collapse

The Federal Reserve and the Securities and Exchange Commission are currently probing the involvement of...

Saturday, June 17, 2023, 07:18:00 AM

Rescuing Fallen Banks Mean No More Fed Rate Hikes, Says Goldman

According to Goldman Sachs, there is no longer a rationale for the Federal Reserve to...

Tuesday, March 14, 2023, 10:28:32 AM