Digital Banking

Goldman Looks To Germany As Part Of Marcus' Expansion

Goldman Sachs is eyeing an expansion of its online bank Marcus across Europe and has chosen Germany as the next region after the U.K., reported the Financial Times.

Citing Richard Gnodde, the chief executive of Goldman Sachs’ U.K. arm, the Financial Times reported Gnodde laid out the expansion in Europe and elsewhere outside of the U.S. in a wide-ranging interview. In it, Gnodde told the paper that a lot of the staff at the bank has moved out of London due to the impending Brexit and worries over market risks, Argentina and a slowdown in PE business.

The consumer finance unit has been around since 2016 and marked a turning point for a company that was used to only catering to the high flyers. Marcus has $20 billion in deposits and $3 billion in loans, but only makes up a tiny portion of the $72 billion in lending the company does. “Over time you can grow very significant businesses in this space,” Gnodde told the Financial Times. “We are doing this because we wanted to be meaningful over time.” Gnodde said Marcus will launch a savings product in June for U.K. customers but will hold off on launching consumer loans in the country until next year or beyond that.

As for an expansion into Germany, the FT pointed out that Marcus will enter a market that is known for being competitive, with players including ING and Santander already in the market. Gnodde said Marcus should be successful because it doesn't have legacy physical branches or old processes like some of the traditional banks. He also brushed off suggestions that it may not be a good time to launch a consumer product. “We’re very focused on the better end of the credit spectrum, and that’s where we’ll stay,” he said in the interview.

Germany isn't the only area of expansion Goldman Sachs is eyeing for Marcus. Bloomberg, citing comments from Goldman Sachs Chief Financial Officer Marty Chavez during an earnings conference call in April, reported Goldman Sachs may get into credit cards via Marcus, its online lender platform.  For Goldman, the move is aimed at finding new businesses that have good returns.



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