Reported by Bloomberg, the new performance details from Goldman’s Platform Solutions division paint a grim picture. In just the first nine months of 2022, the businesses including Apple Card saw a pretax loss of over $1.2 billion.
Looking back to 2020 through the end of September 2022, those losses amounted to $3 billion. But when Q4 results of 2022 are included soon, the number is expected to be close to $4 billion.
Apple Card was launched in the US back in August 2019 and it’s unclear exactly how much of the $4 billion in losses have stemmed from it. However, sources close to the matter believe most of the $1 billion loss in 2021 came from Apple Card. And there are another $2 billion in 2022 losses believed to mostly come from Apple Card and one other Goldman lending platform called GreenSky.
With all of that in mind, plus the unknown of how much was lost on Apple Card in 2019 and 2020, it looks like Goldman has spent somewhere between $1-3 billion on the consumer credit card. The main cause of the losses is said to be from loan-loss provisions (when a bank sets aside money as an expense for future loans it expects won’t be repaid).
Previous estimates inside Goldman aimed for breaking even with the Platform Solutions division by 2022, now the company is hoping it could do that in 2025. Sources believe the transaction-banking business line is likely the only profitable part of the Platform Solutions division.
