Blankfein Says Marcus Will `Move the Needle' in Coming Years

(Bloomberg) -- Lloyd Blankfein is upping the stakes for Marcus, Goldman Sachs Group Inc.’s nearly two-year-old online lender.

“Marcus is evolving from a single offering to a multi-product business that I believe will move the needle for the firm over the coming years,” the chief executive officer said Tuesday at a conference hosted by Credit Suisse Group AG.

Goldman Sachs pushed into consumer lending with the debut of Marcus in 2016, focusing on clients looking to refinance credit-card debt. That’s helping expand the firm beyond its normal large corporate and investor clients, putting it more in touch with retail clients. Goldman Sachs has a competitive advantage with these types of technology-focused ventures, Blankfein said.

“Traditional banks in this space don’t have much of an incentive to refinance credit-card balances on the one hand,” Blankfein said. “And the normal disruptors in most of the spaces that we see disrupting businesses at this point don’t have the balance sheet and frankly aren’t licensed deposit takers as we are.”

Goldman hired former Discover Financial Services President Harit Talwar to lead the development of Marcus in 2015. The unit has originated more than $2 billion and the firm is looking for ways to expand that reach.

Investors had worried that Goldman, along with dozens of other online and marketplace lenders, might cause Discover customers to consolidate credit-card debt and refinance. That hasn’t happened, partly because the firm offers refinancing packages, Discover Chief Financial Officer Mark Graf said at the investor conference.

“We obviously know the guy running Marcus really well because he was our card president, we know Harit well, so we don’t take them lightly,” Graf told investors at the conference. “But we’re not tossing and turning in our beds at night, either.”

©2018 Bloomberg L.P.

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