Goldman to buy GM's credit card unit for US$2.5 billion: Report

Goldman to buy GM's credit card unit for US$2.5 billion: Report

The Goldman Sachs company logo
The Goldman Sachs company logo is seen in the company's space on the floor of the New York Stock Exchange, (NYSE) in New York, on Apr 17, 2018. (Photo: REUTERS/Brendan McDermid)

NEW YORK: Goldman Sachs Group Inc is buying General Motors Co's credit card business for about US$2.5 billion, the Wall Street Journal reported on Thursday (Oct 1), citing people familiar with the matter.

The Wall Street bank won the bidding for the deal over Barclays Plc, according to the report.

GM's credit card issuer Capital One Financial Corp and Goldman have agreed upon the purchase price and expect to finalise the deal in the coming weeks, the report said.

The acquisition will enhance Goldman's focus on its consumer banking business, which it is expanding to even out volatile results from segments such as trading and investment banking.

Goldman currently has a much smaller presence in consumer banking, unlike larger peers JPMorgan Chase & Co and Citigroup Inc, and it is an area Chief Executive Officer David Solomon has been aggressively looking to strengthen.

It is the bank's second major credit card partnership, following the launch of a card with Apple last year.

The purchase would also come at a time when US households are cutting back on debt in response to the COVID-19 pandemic.

GM and Barclays did not immediately respond to requests for comment, while Goldman Sachs declined to comment.

Source: Reuters