Apple card cost Goldman Sachs more than $1 billion in losses

Goldman Sachs has lost $3.03 billion in nearly three years on its group of companies, called Platform Solutions, which hosts Apple Card. Bloomberg reports(Opens in a new window) that the credit card accounted for a significant portion of these losses.

In a regulatory filing disclosed Friday, Goldman Sachs disclosed that from the start of 2020 through the end of September 2022, Platform Solutions’ pre-tax losses were $3.03 billion.

Sources familiar with the matter told Bloomberg that when last quarter’s numbers are added in, Platform Solutions is on track for a three-year total loss of $4 billion, with Apple Card accounting for more than $1 billion of that. figure.

Sachs reported a pretax loss for its credit card division of more than $1.2 billion for the first nine months of 2022 and a pretax loss of $1 billion for 2021. Sources told Bloomberg that the losses were “primarily related to the Apple Card”. Meanwhile, it was also reported that of the roughly $2 billion in total losses in 2022, most came from Apple Card and fintech installment lending platform GreenSky.

The losses stem from the vast investment Goldman Sachs has invested in Apple Card, estimated at between $1 billion and $3 billion, reports 9to5Mac(Opens in a new window). The bank had hoped that Platform Solutions would break even by 2022, but that target has now been pushed back to 2025.

Amid the losses, it was reported(Opens in a new window) that Goldman Sachs is also preparing to cut 3,200 jobs, most of which will come from its business and banking units.

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And it all comes as the Consumer Financial Protection Bureau (CFPB) investigates Goldman Sachs’ card business.(Opens in a new window). According to a regulatory filing filed in August last year, the CFPB is investigating “the application of refunds, the crediting of non-compliant payments, the resolution of billing errors, advertisements and reporting to credit bureaus.”

As CNBC reported(Opens in a new window)these payment issues were due to the rapid adoption of the Apple Card, which caused Goldman Sachs to struggle with related customer service issues.

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