Goldman Sachs is moving its Marcus business line into its wealth-management unit.
According to an internal memo seen by Bloomberg, the firm’s $1.5 trillion investment-management division will now be overseeing Marcus as Goldman looks to launch new business offerings under the brand. While the platform currently offers only personal loans and deposit accounts, the company wants to expand Marcus into mortgages, credit cards and retirement-planning products.
A spokesman for Goldman Sachs confirmed that the memo is accurate.
As a result of the change, the company is disbanding the consumer and commercial banking division that was set up under Stephen Scherr, who has been promoted to Chief Financial Officer. Marcus leadership will now report to Eric Lane and Tim O’Neill, the two heads of the investment-management division, which now brings in almost 20 percent of Goldman’s revenue.
Earlier this month, it was revealed that Goldman Sachs booked a 4 percent year-over-year revenue increase for the third quarter of 2018, with that growth powered in part by increased lending through Marcus. In August, the company launched Marcus in the U.K., reportedly offering the highest savings account interest rate in the country to attract new customers — and there have also been reports that Germany will be the next country in Europe to gain access to the platform.
At the same time, the company might also be reining in Marcus’s lending because of concerns about the stage of the credit cycle and changes in market data. Sources said that the change in 2019 plans is due to current market conditions for consumer lending and could change. Some lenders are worried about the chance for increased losses in consumer credit as interest rates rise. In addition, total household debt for the U.S. hit $13.15 trillion in the fourth quarter ending in December, which is a $193 billion increase from the third quarter.