Goldman Sachs today filed a regulatory statement in its “Platform Solutions” business group that includes a report on the Apple Card. Goldman’s consumer offerings are on track for a total loss of $4 billion from 2020, of which, the Apple Card is worth more than 1,000 million dollars. In other words, the Apple card is responsible for losses of 1,000 billion dollars.
As Bloomberg reports, new financial details from Goldman’s Platform Solutions division paint a grim picture. Only in the first nine months of 2022, companies that include Apple Card posted a pretax loss of more than $1.2 billion.
If we go back to 2020 through the end of September 2022, these losses amounted to $3 billion. But when fourth quarter 2022 results are soon included, the number should be closer to $4 billion.
Apple launched the Apple Card in the United States in August 2019 and it’s unclear exactly how much of the $4 billion in losses stems from this. However, sources close to believe most of $1 trillion in losses in 2021 come from Apple Card itself. Also, there are still $2 billion in losses in 2022 that would come mostly from Apple Card and another Goldman lending platform called GreenSky.
With all of that in mind, plus the question of how much was lost on the Apple Card in 2019 and 2020, it looks like Goldman lost between $1 billion and $3 billion on the credit card. Losses would be the main cause of provisions for loan losses (when a bank sets aside money as an expense for future loans that it expects will not be repaid).
Previous Goldman Sahs estimates suggested that the Platform Solutions division would break even in 2022, but they now expect it to be able to do so in 2025. Sources believe that the transaction banking business is probably the only profitable part of the Platform Solutions division.
It seems clear that launching a new credit card is not an easy undertaking and will bring benefits. Is it one of main reasons why Apple did not expand the number of markets in which you launched this product and, given what has been seen, It doesn’t look like it’s going to expand in the short term.
