Goldman Sachs is unwinding its fintech operations, and put Greensky on the block in April.

Goldman Sachs (NYSE: GS) is facing a significant loss as it unwinds its acquisition of specialty lender GreenSky, signaling its retreat from its Main Street ambitions. Investment firms including Apollo, Sixth Street, and Warburg Pincus have submitted initial bids valuing GreenSky at a mid-nine-figure amount.

The sale includes GreenSky’s loan-writing operations as well as legacy loans on Goldman’s books. The move comes as Goldman Sachs reevaluates its strategic priorities, with CEO David Solomon stating that GreenSky no longer fits with the bank’s current focus.

Goldman’s attempt to reinvent itself by acquiring GreenSky and expanding its consumer arm, Marcus, proved unsuccessful. The intention was to convert GreenSky borrowers into Goldman Sachs customers who would potentially utilize services like the Apple-branded credit card or open Marcus savings accounts. However, the plan did not materialize as expected. (SEMAFOR)

The bank’s transformation into a lending business did not align with GreenSky’s operations, leading to this strategic reversal. This could be attributed to execution failures rather than a lack of vision. It may be recalled that having embraced commercial banking activities during the 2008 crisis, Goldman faced challenges due to regulatory changes. However, it also had the opportunity to engage in traditional banking practices such as taking deposits and giving loans.

Meanwhile, private equity firms like Apollo and Sixth Street, which have ventured into corporate lending and insurance, are showing interest in GreenSky.

In 2019, Goldman initially considered purchasing GreenSky but decided against it. However, two years later, new executives, under the advice of Stephanie Cohen, Goldman’s consumer-banking head at the time, proceeded with the acquisition.

The sale of GreenSky marks a significant turning point for Goldman Sachs, as it reevaluates its approach and focuses on its core operations.

Related Story: Goldman Sachs Snaps Up BNPL Fintech Greensky For $2.24B

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