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Goldman Sachs Taking Its Online Deposit Business To The UK

Goldman Sachs is reportedly gearing up to expand its retail banking unit in the U.K. — taking a page from its efforts in the U.S.

According to a report in The Financial Times, citing Stephen Scherr, the bank’s head of Strategy, Goldman Sachs is preparing to rollout an online deposit business across the pond by the middle of 2018. The business will be launched under its Marcus brand but may buy deposits if opportunities should arise.

“Much like in the U.S., we’re aiming to offer consumers easy-to-use and higher-returning savings options than [they] might have elsewhere,” Scherr told the Financial Times. In the future, it could add consumer lending into the mix in the U.K.  

Since launching, Marcus has originated around $1 billion in loans and has marching orders from Goldman Sachs CEO Lloyd Blankfein to generate an additional $1 billion in loans by the end of 2017, noted the report, which also cited Harit Talwar, head of Goldman’s Online Lending and Deposit businesses.

The move to expand its retail banking efforts comes at a time when it has been struggling with its traditional businesses, thanks in part to new rules that hurt big banks’ abilities to take risks. Its core debt trading unit has had two less-than-stellar quarters in a row, pointed out the Financial Times.

In the U.K., Goldman has already hired Des McDaid, a former TSB director. Scherr said the bank was looking to add to McDaid’s group, bringing it to around 30 to 50 employees from the current 15. That will include a call center coming to the U.K. by the middle of 2018.

The executive noted the main reason for Goldman to expand into the U.K. is the “stickiness” of deposit funding. He said it’s less likely to get hurt during times when the markets are in turmoil.

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