Goldman Sachs To Sell Consumer Lending Business GreenSky: Report

Goldman Sachs Group Inc GS is reportedly in advanced talks to divest its specialty lender, GreenSky, to a consortium of investment firms.

The consortium includes Sixth Street, Pacific Investment Management and KKR & Co Inc KKR, according to a WSJ report.

If a deal is reached, it is expected to be of $500 million worth, which is less than one-third of what Goldman paid for the business just a year-and-a-half ago.

The report noted Goldman paid about $1.7 billion for GreenSky, hoping to become a bigger competitor in the consumer lending space as GreenSky specialized in allotting loans for home renovations.

Goldman’s CEO David Solomon reportedly batted for the acquisition despite opposition from a number of the bank’s partners, creating friction.

The partners felt several Goldman’s products would not be viable for selling to GreenSky borrowers and that the latter’s CEO David Zalik quoted a high price.

Ultimately, Goldman increased its prior offer and announced that it was buying GreenSky, making Zalik one of Goldman’s largest individual shareholders.

The report further added that, soon after, questions arose about GreenSky’s consumer strategy and the money being spent on it leading Goldman to initiate an internal review, which resulted in the bank to pull back.

GreenSky is the second M&A deal during Solomon’s tenure as CEO that Goldman is unwinding.

Early this year, Goldman said a major part of its consumer-lending business, including credit cards and GreenSky, had lost about $3 billion since 2020. The amount had increased to $4 billion by the end of the second-quarter.

Price Action: GS shares are trading lower by 3.24% at $330.80 in premarket on the last check Wednesday.