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Goldman Sachs lost $1.2 billion in 2022 mostly because of Apple Card
Posted on 1/13/23 at 8:49 pm
Posted on 1/13/23 at 8:49 pm
quote:
Goldman's collection of businesses, known as Platform Solutions, lost over $1.2 billion in pre-tax losses in the first nine months of 2022 and was driven mainly by loan-loss provisions. It was mostly tied to the Apple Card, according to Business Insider.
oldman spent a lot of money to help launch Apple Card and its other consumer services. A report from 2019 revealed the bank spent around $1.3 billion on its consumer services, and reportedly spent roughly $350 to acquire every new Apple Card customer.
Due to Apple Card benefits such as no fees and a competitive interest rate, analysts believed "The Apple Card portfolio may generate lower revenues and face higher loss content relative to the industry average."
But Goldman CEO David Solomon called its partnership with Apple "the most successful credit launch ever" and noted that although its investment draws on the bank's returns in the short term, it's critical to expanding its capabilities and competitive position.
LINK
$350 in CAC? JFC. I've never paid a penny in interest and get back money on every purchase. I must cost them a bunch to have as a customer. I guess the payback period for the $350 GS spent to aquire me is infinity
3
Posted on 1/13/23 at 8:59 pm to rickgrimes
quote:
$350 in CAC? JFC. I've never paid a penny in interest and get back money on every purchase. I must cost them a bunch to have as a customer. I guess the payback period for the $350 GS spent to aquire me is infinity
You regalize they charge the merchants +2.5% per transaction, right? Some they may charge three.
Posted on 1/13/23 at 9:09 pm to rickgrimes
quote:
$350
OT board.
Posted on 1/14/23 at 3:13 am to rickgrimes
Couldn’t happen to a nicer bunch
Posted on 1/14/23 at 3:32 am to SaintsTiger
quote:
I've never paid a penny in interest and get back money on every purchase. I must cost them a bunch to have as a customer.
Your data that you provided and gave them access to get the card as well as your purchase data has monetary value. They are selling that data.
Posted on 1/14/23 at 9:54 am to CajunTiger92
JPMorgan had a similar event with the launch of the Chase Sapphire Reserve. The bigger question is whether the renewals hit expectations a year later. Chase charges $650 a year for the Reserve now. A lot of that fee gets dealt back via travel credits but it’s still an eye popping amount of money.
Posted on 1/14/23 at 10:29 am to SaintsTiger
quote:
You regalize they charge the merchants +2.5% per transaction, right? Some they may charge three.
To be fair only a portion of the fee goes to the issuing bank.. The interchange fee is probably closer to 1.5%. However the rest of the fees still have to paid so we get closer to 2% actual fees
Posted on 1/14/23 at 10:42 am to lynxcat
quote:
Chase charges $650 a year for the Reserve now.
My renewal was just $550 and I canceled.
I kept my AMEX Platinum. If I'm having the pleasure of spending $650 a year, you better not put a limit on the card and offer world class service.
Chase does none of that. I canceled all my Chase cards.
Posted on 1/14/23 at 10:57 am to SaintsTiger
quote:
You regalize they charge the merchants +2.5% per transaction, right? Some they may charge three.
A lot of people applied for Apple Pay just to get the titanium card as a memento, and the number of people GS rejected turned into a PR nightmare. I find this entertaining, given the people they approved seem to be the same types that pay their balance at the end of every month…not exactly the ideal population for a CC to target.
Posted on 1/15/23 at 3:36 am to JKLazurus
quote:
A lot of people applied for Apple Pay just to get the titanium card as a memento, and the number of people GS rejected turned into a PR nightmare. I find this entertaining, given the people they approved seem to be the same types that pay their balance at the end of every month…not exactly the ideal population for a CC to target.
I also heard that while Goldman Sachs was trying to target the best credit worthy people, they did approve some low to medium credit score individuals with some crazy limits.
I wonder how many of those went belly up:
CNBC in September
quote:
Goldman's 2.93% net charge-off rate is double the 1.47% rate at JPMorgan's card business and higher than Bank of America's 1.60%, despite being a fraction of those issuers' size. Goldman's losses are also higher than that of Capital One, the largest subprime player among big banks, which had a 2.26% charge-off rate.
This post was edited on 1/15/23 at 3:38 am
Posted on 1/15/23 at 5:48 am to Tarps99
quote:
lot of people applied for Apple Pay just to get the titanium card as a memento, and the number of people GS rejected turned into a PR nightmare. I find this entertaining, given the people they approved seem to be the same types that pay their balance at the end of every month…not exactly the ideal population for a CC to target
I got one. $40k limit no problem. It’s stayed in my desk drawer and I only have used to buy a couple macs interest free. Can’t see myself using this for daily spend over a CSR
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