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Goldman Sachs Group Inc. is set to divest its General Motors credit card program. The sale, which will be supervised by General Motors, is part of Goldman Sachs' broader effort to streamline its operations and focus on its primary business sectors.
Barclays Leads Race to Acquire GM Card Program
Nasdaq reported that Barclays has emerged as the prime candidate to assume control of the credit cards with about $2 billion in outstanding balances. Initially, U.S. Bancorp and Bread Financial were also in the race but have since receded from contention. Sources close to the matter anticipate a deal could be finalized by this summer, marking a significant shift in the issuer for the GM card program.
Internal Announcements and Strategic Divestitures
An internal announcement was made to Goldman Sachs' Platform Solutions division employees, specifically those involved with the GM card, about their intention to seek a new issuer for the program. This card, issued by Mastercard and launched in 2022, was designed to allow customers to accrue points toward purchasing or leasing General Motors vehicles, including Buick and Cadillac brands.
Reuters noted that this strategic decision mirrors Goldman Sachs' actions from last November when it initially considered ending its co-branded credit card agreement with GM. Despite high hopes for leveraging the GM credit card program to transform cars into e-commerce platforms, the results have not met expectations, leading to this significant pivot.
Implications for Employees and Future Operations
Goldman Sachs has committed to compensating employees affected by this divestiture with a package equivalent to one year's salary should they face job loss. This move to divest the GM card program is one of the last steps in the firm's reduction of its consumer lending division, following the sale of specialty lender GreenSky and a significant portion of its personal loan portfolio.
Goldman's Consumer Credit Strategy Shift
The decision to offload the GM credit card program is consistent with Goldman Sachs' shift in strategy, focusing less on consumer-facing credit operations and more on its foundational business components.
This comes shortly after rumors of Goldman Sachs planning to exit its credit card partnership with Apple, indicating a significant redirection from consumer credit ventures toward more traditional banking activities.
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