Goldman Sachs (GS) said Wednesday it reached an agreement to sell lender GreenSky to a consortium led by investment firm Sixth Street Partners, its latest retreat from a costly push into consumer banking.
The transaction, which is expected to close next year, will result in a $0.19-per-share hit to third quarter earnings for the Wall Street giant when it releases results next Tuesday. Goldman didn’t disclose a purchase price.
The move is part of a larger effort by CEO David Solomon to pull back from some mass-market businesses as he tries to focus the firm around its traditional core strengths of wealth management, trading, and investment banking.
“This transaction demonstrates our continued progress in narrowing the focus of our consumer business,” Solomon said in a release.
Solomon is under pressure to improve Goldman’s results after reporting the firm’s lowest quarterly profits in three years. He and the firm are wrestling with everything from job cuts and a global investment banking slump to reports of partner unrest.
This is the second sale reached by Solomon in as many months. In September Goldman also announced it had found a buyer for a personal finance unit that serves the mass affluent.
Goldman’s stock was down nearly 1% Wednesday as of 3:30 p.m. New York time. Year to date, the stock is down 9%. Since Solomon became CEO in October 2018, it has risen 39%.
Goldman is selling GreenSky less than two years after buying it in 2022 for $1.73 billion. It provided Goldman with a fintech platform for home improvement lending, but the firm looked to sell it as it decided to move away from a push into consumer banking.
The group purchasing it is led by Sixth Street, which was formed in 2009 by a group of former Goldman Sachs executives.
It also includes funds and accounts managed by KKR, Bayview Asset Management, and CardWorks. It also includes support from PIMCO, which acquired various GreenSky assets and contributed financing to the effort.
Click here for in-depth analysis of the latest stock market news and events moving stock prices.
Read the latest financial and business news from Yahoo Finance
Credit: Source link
