Goldman Sachs announced on Thursday plans to sell its fintech lending platform GreenSky, as part of a strategic shift by CEO David Solomon. The announcement was made during the Goldman Sachs Financial Services Conference. The move is expected to result in a decline in shares and a third-quarter earnings impact of $0.19 per share.
The home improvement lender, acquired last year for $1.7 billion despite opposition from some deputies, will be sold to an investor group led by Sixth Street. Other members of the consortium include KKR, Bayview Asset Management and CardWorks. The sale is anticipated to conclude in Q1 2024, with Goldman managing GreenSky until then.
The sale follows a $504 million impairment on GreenSky in Q2 and is expected to reduce Goldman's Q3 earnings due to write-downs of GreenSky intangibles, marks on the loan portfolio, and higher taxes. These impacts will be partially offset by the release of loan reserves tied to the transaction.
This decision comes as Solomon seeks to narrow Goldman's consumer business focus and retreat from retail banking. Instead, Solomon is shifting the company's focus towards trading, investment banking, and wealth management, following criticism from unhappy partners and unfavorable reports about him.
The rapid sale of GreenSky to Sixth Street Partners comes after a $500 million writedown; it was initially bought for $2.25 billion in 2021 but its value depreciated to $1.7 billion.
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