Goldman Sachs' Credit Card Business Exit Reportedly Delayed Due To High Charge-Off Rates And Lenient Underwriting: Bank Discloses Potential $400M Pre-Tax Hit
Portfolio Pulse from Benzinga Neuro
Goldman Sachs is facing a potential $400 million pre-tax hit from the sale of its GM credit card portfolio due to high charge-off rates. The sale to Barclays has been delayed, impacting Goldman's stock, which fell over 4%. The bank's consumer-lending ventures have resulted in significant losses, prompting a shift back to core investment banking services.
September 11, 2024 | 9:38 am
News sentiment analysis
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NEUTRAL IMPACT
Barclays is hesitant to acquire Goldman's GM credit card portfolio due to high charge-off rates, affecting the deal's progress.
Barclays' hesitation to proceed with the acquisition due to high charge-off rates indicates potential risk concerns, but it does not directly impact its stock price at this stage.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 60
NEUTRAL IMPACT
General Motors is indirectly affected by the delay in the sale of its credit card portfolio managed by Goldman Sachs to Barclays, due to high charge-off rates.
While GM is not directly impacted financially by the delay, the management of its credit card portfolio is in limbo, which could affect its consumer finance operations indirectly.
CONFIDENCE 80
IMPORTANCE 50
RELEVANCE 50
NEGATIVE IMPACT
Goldman Sachs is experiencing a delay in selling its GM credit card portfolio to Barclays due to high charge-off rates, leading to a potential $400M pre-tax hit. This has caused a 4% drop in its stock price.
The delay in the sale of the GM credit card portfolio due to high charge-off rates directly impacts Goldman Sachs' financials, leading to a significant pre-tax hit. This has already resulted in a notable drop in its stock price, indicating negative investor sentiment.
CONFIDENCE 95
IMPORTANCE 90
RELEVANCE 100
NEGATIVE IMPACT
JPMorgan Chase's shares fell 7.5% after COO Daniel Pinto adjusted forecasts on expenses and net interest income, unrelated to Goldman's news.
JPMorgan's stock decline is due to internal forecast adjustments and is not directly related to Goldman's credit card business news.
CONFIDENCE 90
IMPORTANCE 30
RELEVANCE 20