Goldman CEO dismisses notion GM credit card exit is messy
3:25 pm Wednesday, September 11th, 2024
NEW YORK (Reuters) – Goldman Sachs CEO David Solomon on Wednesday dismissed the notion that the bank’s early exit from its credit card partnership with General Motors was messy, saying the firm had anticipated the problems.
His comments to CNBC came after he said earlier this week that Goldman would take a charge from unwinding the business.
“I actually don’t think it’s proving to be messier than we thought,” Solomon told CNBC in an interview on Wednesday when asked if the exit was messier than the firm hoped.
“It is very unusual for people to transition credit card programs in the middle of contract periods.”
Goldman will probably take a $400 million pretax charge from the sale of loans to small and medium retail businesses and its exit from the GM credit card partnership, Solomon told investors earlier this week.
The bank is close to finalizing a deal to transfer its joint credit card business with GM to Barclays, a source familiar with the matter said on Tuesday.
The exit from the business partnership with GM, which has about $2 billion of outstanding loans, is part of Goldman Sachs’ move to narrow its focus on consumer services.
Solomon expects the U.S. Federal Reserve to cut interest rates two or three times this year, with a first 25 basis-point move later this month.
“My view on this is… very data dependent and the data has evolved during the year,” he said.
(This story has been refiled to remove an extraneous word ‘firm,’ from the headline)
(Reporting by Saeed Azhar; editing by Lananh Nguyen and Cynthia Osterman)
