Goldman Sachs seeks acquisition to strengthen consumer banking unit

Goldman Sachs, which reported that profits more than doubled year-over-year (YoY) in the fourth quarter of 2020, is reportedly on the hunt for an acquisition to strengthen its Marcus consumer banking unit. The bank’s net revenues in consumer and wealth management were $1.65B for Q4 2020, a 17% jump YoY.

Why should we care?
The quest to buy a company to grow Marcus is the result of slowing loan and deposit growth, Reuters reported. Among potential targets, digital banking is a key area of interest, given its enhanced importance in the context of the pandemic. Growing consumer banking arm Marcus is part of a strategy to reduce the bank’s dependence on trading and investment banking revenues. Meanwhile, in Goldman’s strategic update, the bank outlined an ambitious plan for Marcus, which includes a checking account that will launch this year. The vision is to offer that product alongside credit cards, loans, savings accounts, along with a robo-adviser offering that will also roll out this year. Marcus currently has $97B in deposits, with the goal to grow that number to more than $125B by 2024.