Goldman Bets Big on Private Credit Despite Market Chaos

Goldman Sachs kicked off the earnings season on Monday (April 13) with conviction: private credit is still worth the risk, even as the market makes that bet riskier.

In a call with analysts, Chief Executive Officer David Solomon said the firm continues to “feel good about the long-term opportunity of private credit and our ability to deliver attractive risk-adjusted returns for clients.” But he didn’t pretend conditions were ideal. “Volatility increased meaningfully amid concerns around AI-driven disruption in sectors like software, heightened uncertainty in parts of private credit, and the conflict in the Middle East,” he said.

That tension between opportunity and risk framed the first quarter’s strong financial backdrop. Goldman reported net revenues of $17.2 billion, up 14% year on year.

Digital Engagement and Platform Investment

Beyond capital markets activity, the quarter highlighted a continued shift toward digital engagement. Solomon said the firm saw “elevated engagement with our digital channels, including Marquee, with monthly average users up over 30% year-over-year,” alongside surges in client activity through its research portal.

Those gains are being paired with infrastructure investment. Chief Financial Officer Denis Coleman pointed to accelerated spending on cloud migration and data architecture, describing them as necessary to “optimiz[e] the deployment of AI solutions across the firm,” with the aim of improving productivity and efficiency over time.

Deposits and Balance Sheet Strategy

Deposit growth also emerged as a central theme, tied closely to funding and lending priorities. Solomon said the firm saw “significant” deposit-raising activity over the quarter, much of it through the Marcus platform, describing deposits as “a strategic source of funding for us that we continue to grow.” Company materials indicated that overall deposits in the most recent quarter stood at $561 billion, up from $501 billion in the year ago period.

Coleman linked that growth directly to balance sheet deployment. The firm expanded lending across equities financing, corporate loans and private wealth, with record lending balances in certain segments.

Asked later on the call about private credit, Solomon said that “private credit in the broadest definition you could possibly come up with is $3.5 trillion dollars of assets. The thing that’s been getting a lot of focus is direct lending, and direct lending is about $1.6 trillion-$1.7 trillion of assets.” The retail channel for that direct lending business “is about 20% or about $230 billion of NAV.  There obviously is heightened redemptions in certain peer-managed funds. These peer-managed funds have been concentrated in retail outflows as opposed to institutional outflows,” he told analysts.

As for Goldman, the CEO said spreads are becoming more lender friendly, adding that “when you look at our first quarter 2026 subscriptions and our GS Credit BDC, 40% of them were from institutions, many of whom are first-time investors on our platforms, including insurance companies, banks, pension funds. When you look at our broad platform, it’s over 80% institutional partners,” a mix he termed “very, very broad and very, very diverse.”

Credit Card Transition and Platform Solutions

Goldman’s credit card business remains in transition. Platform Solutions revenue declined year over year, by 33% to $411 million, reflecting the move of the Apple Card portfolio to held-for-sale status, with management indicating that revenues in the segment are expected to remain lower through the year. The supplemental materials released alongside earnings indicated that credit card loans in the first quarter were $19 billion, down from $20 billion in the fourth quarter of 2025 and $21 billion in the first quarter of 2025.

The repositioning signals a narrower focus within consumer-facing businesses, with capital being redirected toward institutional and financing activities, which has widely been discussed across several past quarters.

Provision for credit losses rose to $315 million, reflecting growth and impairments in wholesale lending.

Looking ahead, management maintained a constructive tone, supported by expectations for continued client activity and a regulatory backdrop that Solomon said appears to be moving toward a more “balanced” framework.  Shares were down 2% in intraday trading on Monday.