Goldman Sachs warns of hit to third-quarter earnings on deal to offload GreenSky

David Solomon, CEO of Goldman Sachs, throughout a Bloomberg Television on the Goldman Sachs Financial Services Conference in New York on Dec. 6, 2022.

Michael Nagle | Bloomberg | Getty Images

Goldman Sachs stated Wednesday that it agreed to promote its fintech lending platform GreenSky to a gaggle of buyers led by personal fairness agency Sixth Street.

The deal, which features a e-book of loans created by Goldman, will end in a 19 cents per share discount to third-quarter earnings, Goldman stated within the statement. The New York-based financial institution is scheduled to disclose outcomes Tuesday.

The transfer is the most recent step CEO David Solomon has taken to retrench from his ill-fated push into retail banking. Under Solomon’s route, Goldman acquired GreenSky final yr for $1.7 billion, overruling deputies who felt the house enchancment lender was a poor match. Months later, Solomon determined to seek bids for the enterprise amid his broader transfer away from client finance. Goldman additionally bought a wealth administration business and was reportedly in talks to offload its Apple Card operations.

“This transaction demonstrates our continued progress in narrowing the main focus of our client enterprise,” Solomon stated within the launch.

The financial institution is now centered on its core strengths in funding banking and buying and selling and its push to develop asset and wealth administration charges, he added.

Goldman will proceed to function GreenSky till the sale closes within the first quarter of 2024, the financial institution stated.

The anticipated hit to third-quarter earnings contains bills tied to a write down of GreenSky intangibles, in addition to marks on the mortgage portfolio and better taxes, offset by the discharge of mortgage reserves tied to the transaction, Goldman stated.

It follows a $504 million second-quarter impairment on GreenSky disclosed in July.

The Sixth Street group contains funds managed by KKR, Bayview Asset Management and CardWorks, in accordance to the discharge.

Private fairness teams have performed key roles in a number of of the banking trade’s asset divestitures for the reason that begin of the yr, offering funding for the PacWest merger with Banc of California, for instance.

Read extra: Goldman Sachs faces big write down on CEO David Solomon’s ill-fated GreenSky deal

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