Goldman Sachs is reportedly in advanced talks to sell its money-losing fintech unit, GreenSky, at a significant loss. This comes after Goldman’s CEO, David Solomon, paid over $2 billion to acquire the home improvement lender. The investment banking giant is in exclusive negotiations with a consortium led by Sixth Street Partners, which includes Pacific Investment Management and KKR & Co. The deal would value GreenSky at around $500 million, beating out a rival bid from Apollo Global Management. Goldman Sachs initially agreed to purchase GreenSky in an all-stock deal worth $2.24 billion in September 2021, but the value dropped to $1.7 billion by the time the acquisition was completed in March 2022. The sale of GreenSky is part of Goldman’s broader retreat from its consumer business, which has incurred losses of $3 billion in the past three years. The bank has also divested the majority of its unsecured consumer loans. The acquisition of GreenSky was an attempt by CEO David Solomon to diversify its clientele beyond high-end and ultra-wealthy customers. However, the COVID-19 pandemic, which kept consumers at home and led to increased home renovations, weakened GreenSky’s business. Additionally, high interest rates and rising prices for building materials have weighed on home-renovation lending. As a result, Goldman Sachs took a $504 million writedown on GreenSky in its second-quarter earnings, and further charges may be necessary. Solomon faced opposition from skeptical partners but proceeded with the GreenSky acquisition. Last month, Goldman sold its personal financial management business to Creative Planning. These recent developments have raised questions about Solomon’s leadership. Despite criticism, Solomon stated that he reflects on feedback and strives to improve. In the second quarter, Goldman Sachs’ profit declined by 60%, primarily due to writedowns on consumer businesses and real estate investments.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
