Goldman Sachs Group Inc. has reached an agreement to sell its GreenSky consumer-lending division, with the transaction set to impact its third-quarter earnings. The buyer is a private-equity consortium led by Sixth Street Specialty Lending Inc., a specialist in financing solutions based in New York.
The sale will result in a decrease of 19 cents per share in Goldman Sachs’ third-quarter profit. This amounts to approximately $62.6 million, based on the number of outstanding shares of the investment bank.
The price of the sale has not been disclosed by Goldman Sachs. The group of buyers includes KKR & Co., Bayview Asset Management, and CardWorks. Pimco is also providing support for an asset acquisition, while CPP Investments is offering financing.
The impact on earnings is attributed to increased operating expenses for the write-down of intangible assets, along with a decrease in net revenue caused by marks on GreenSky’s loan portfolio and an increase in taxes. However, the bank states that this was partly offset by a release of loan reserves reflected in the provision for credit losses.
Goldman Sachs’ Chief Executive, David Solomon, expressed that this deal illustrates the progress made in narrowing the focus of their consumer business.
In 2021, the investment bank acquired GreenSky for $2.25 billion as part of its expansion of the Marcus consumer-banking unit. However, earlier this year, Goldman Sachs reversed its strategy and announced a $3 billion loss on its consumer business, along with plans to divest GreenSky.
Furthermore, the bank underwent a realignment of its businesses into three main units: Global Banking & Markets, Asset & Wealth Management, and Platform Solutions.
Throughout this year, criticism of CEO David Solomon has been mounting, with media reports even suggesting a rift had developed between partners at Goldman Sachs.
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