Goldman Sachs’ encroachment into Main Street finance appears to be going well.
Its new lending platform, Marcus, which targets prime borrowers with credit scores above 660 is issuing out loans at a fast clip, according to a new report by CBInsights.
Marcus, launched in October 2016, is the firm’s first consumer lending platform. It offers no-fee personal loans of up to $US30,000 for two- to six-year periods.
The report by CBInsights, which dissects the investment bank’s broader strategy, shows Marcus issued $US1 billion in personal loans more quickly than four other well-known financial technology startups, including LendingClub and Prosper.
“Marcus reportedly passed $US1 billion in loan origination in its first 8 months and is expected to originate $US2 billion by the end of 2017,” the report said. “While data on number of loans doled out is hard to find, Goldman reached its first billion in consumer loans significantly faster than competing online personal loan companies.”
Goldman is also positioned better in the retail lending space than its legacy competitors, according to the report. “Another advantage Marcus has over other bank incumbents looking to launch a competing initiative is its non-legacy IT architecture and the fact that Goldman does not have an existing consumer credit card business for Marcus to cannibalise,” the report said.
The firm sees a $US1 billion opportunity in the new offering, according to a slideshow presentation by the bank’s president and co-chief operating officer, Harvey Schwartz.
In the presentation, delivered at the Barclays Financial Services Conference earlier in September, the firm outlined how it will “prudently grow” its lending business. The bank expects the unit to grow to $US2 billion in originations by year end.
Marcus is part of a broader strategy shift by the investment bank, which is best known for trading and investment banking.
It has been expanding its retail footprint, launching GSBank.com in April 2016. GSBank.com offers customers a 1.20% interest rate on their deposits, which can be as low as $US1, as well as 12 month- and 5 year-term CDs. The retail platform has $US15 billion in deposits, according to the presentation.
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