Goldman will pay $2.5 billion to  Capital One, the owner of the business.

Goldman Sachs (NYSE: GS) is making a second foray into credit cards after its partnership with Apple (NASDAQ: AAPL) for Apple Card. According to the Wall Street Journal, which first reported the development, Goldman Sachs pipped Barclays plc (LON: BARC) to the finishing line with a bid of approximately $ 2.5 billion for the GM credit cards business. (FT)

The deal with Capital One (NYSE: COF) is yet to be sealed, according to the people with knowledge of the matter. However, its broad contours have been agreed upon.

The GM (NYSE: GM) card business has roughly $ 2.5 billion in outstanding balances.

Goldman’s consumer push

Goldman Sachs has been steadily expanding its consumer book. Apart from its well-publicized tie-up with Apple for Apple Card, the Wall Street giant also entered other consumer deals. These included credit to Jet Blue Airways (NASDAQ: JBLU) passengers and Amazon (NASDAQ: AMZN) marketplace sellers.

It has also grown its digital bank, Marcus, to a point where it has $ 92 billion in deposits.

For a co-branded credit card business such as GM’s, Goldman will own the assets, liabilities, and risks of the card portfolio. However, GM will get a fixed percentage of the profits, according to the WSJ.

In the current deal, Goldman Sachs will gain about 1 million GM cardholders. It will also benefit from their annual spending of roughly $ 8.5 billion.

The emphasis on consumer lending comes in the face of declining profits at Goldman’s traditional flagship businesses in trading and the capital markets.

In another indication of its growing emphasis on consumers, Goldman Sachs has reshuffled its organization and created a new standalone consumer division. The division will include Marcus, and be co-headed by Strategy chief Stephanie Cohen and Tucker York, the head of its private wealth business.

The new unit is named the Consumer and Wealth Management Division.

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