Goldman Sachs' Digital Bank Unit Surges to $989M in Nine Months, Eyes 2025 Profit
Goldman Sachs' digital banking unit, the platform, has seen a significant surge in revenues, jumping from $334 million in 2020 to $989 million in the first nine months of 2022. However, the unit has also incurred substantial losses, totaling over $3 billion since 2020.
The platform's executives are now predicting profitability by 2025, a positive outlook despite recent setbacks. The unit's losses have been substantial, with Platform Services alone reporting losses of $783 million in 2020, $1.05 billion in 2021, and $1.21 billion in the first nine months of 2022.
Operating expenses in the platform have roughly doubled, from $630 million in 2020 to $1.26 billion in 2022 through Sept. 30. Despite these increased costs, net revenues have grown significantly, indicating potential progress towards profitability.
In other news, Goldman Sachs has begun a presumed 3,200-person cull in its Marcus unit this week. The bank has also reframed its earnings since 2020 along the divisions created in October 2022, with Marcus, its consumer-banking unit, split between two new divisions.
The bank's provision for credit losses related to Platform Services businesses was $942 million in the first nine months of 2022, compared to $487 million in 2020. Despite these challenges, the platform's executives remain optimistic about the unit's future prospects, forecasting profitability by 2025.
