Goldman executives clashed over consumer bank before retail retreat
Goldman Sachs’s decision this week to pull back from retail banking followed disagreements over strategy that in one instance pitted chief executive David Solomon against his subordinates, people familiar with the matter said.
Solomon had high hopes for Goldman’s Marcus-branded consumer project, which started in 2015 under his predecessor, Lloyd Blankfein. Solomon, who became chief executive in 2018, viewed the operation as a fintech in the making that could provide the Wall Street bank with the kind of steady revenues that many analysts say it needs to boost its stock market valuation.
But it failed to turn a profit and investor unease with the project prompted Solomon’s move on Tuesday to scale back the ambitions for Marcus and split it in two.
Under the restructuring announced on Tuesday, consumer banking will be subsumed within Goldman’s wealth management business. Meanwhile, a new “platform solutions” business will include Goldman’s credit card partnerships with companies such as Apple and General Motors and an online lending business, called GreenSky, acquired this year.
The disagreements over strategic direction that broke out over the eight years of the Marcus product came as Goldman cycled through three different consumer banking heads, moving from executives with experience in retail finance to its own bankers and tech engineers.
Blankfein’s first hire at Marcus was Harit Talwar, the former US cards boss at Discover who went on to staff the business with other consumer banking veterans. Talwar left Goldman last year and Peeyush Nahar was recruited last year to run the consumer business day to day. Nahar comes from a technology background with prior stints at Uber and Amazon.
Nahar reported to Stephanie Cohen, who came from an investment banking background before Solomon promoted her in 2021 to be co-head of the soon-to-be-bygone consumer and wealth management division.
In Solomon’s reshuffle this week, Cohen, who also led strategy for Goldman and was a champion of the GreenSky deal, according to people familiar with the matter, will run the new platform solutions business. Nahar will become a co-chief operating officer.
This story originally appeared on: Financial Times - Author:Joshua Franklin
