JPMorgan–Apple negotiations, which commenced earlier this year, have recently progressed
Goldman Sachs is facing a costly exit from the Apple partnership, which is perceived as hazardous. After experiencing losses in consumer banking, Goldman Sachs has redirected its attention to investment banking and trading. A source familiar with the matter stated on Tuesday that JPMorgan Chase (JPM.N) is in discussions with Apple (AAPL.O) about replacing Goldman Sachs (GS.N) as the tech giant’s credit-card partner. The source, who requested anonymity due to the confidentiality of the discussions, stated that the discussions have progressed in recent weeks, but any potential agreement could still be months away.
The partnership between Goldman Sachs and Apple, which encompassed savings accounts and credit cards, was terminated last year. Goldman is on the brink of a costly exit from the partnership, which is perceived by other lenders as being too risky and unprofitable. After its unsuccessful venture into consumer banking, Goldman Sachs has returned to its traditional core competencies: investment banking and trading. The consumer business that CEO David Solomon advocated for has suffered billions of dollars in losses.
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Goldman’s retail strategy was distinguished by the card, which was introduced in 2019. According to a source who spoke with Reuters last year, Apple and Goldman Sachs issued credit cards to customers with lower credit scores in an effort to increase revenue. Cashback and “no fees” were among the benefits that the card provided. However, Goldman Sachs was required to allocate additional funds for substandard loans, which resulted in increased paper losses for its consumer business. Additionally, Goldman Sachs is terminating its credit card partnership with General Motors (GM.N), which opens a new tab. Solomon refuted the notion that the bank’s early exit from GM was chaotic earlier this month, asserting that the bank had foreseen the issues.
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