Wall Street giant Goldman Sachs’ (GS) young digital consumer business has been growing at a record clip.
Marcus by Goldman Sachs, the two-year-old online consumer lending and savings arm, just surpassed the $3 billion mark for consumer loans during the first-quarter, while the U.S. deposits franchise surpassed $20 billion.
“We are pleased with the progress we are making in consumer franchise,” said CFO Marty Chavez on the firm’s first-quarter earnings call, noting the goal for the firm is “to create a leading platform for millions of consumers to take control of their financial lives.”
Marcus’s lending business, which gives out personal loans up to $40,000 for credit-worthy borrowers, has been the fastest growing online consumer lender, first hitting the $1 billion milestone in just eight months while some of its peers took over a year. Meanwhile, Marcus’ U.S. deposits business started with $9 billion when Goldman made the GE Capital acquisition in 2016.
Earlier this month, Marcus by Goldman Sachs made a big push for Main Street America by rolling out a traditional advertising campaign for U.S. deposits, touting its high annual percentage yield of 1.6%, which is well-above competitors and the national average of 0.07%.
Marcus has also made some acquisitions, including buying Clarity Money, a personal finance app with one million customers founded by Adam Dell.
On the earnings call, Chavez called this “an important next step and certainly not the last.”
The consumer banking business is relatively new for Goldman. Traditionally, Goldman’s clients have included corporations, financial institutions, governments, and high-net-worth individuals. During the 2008 financial crisis, Goldman was required to convert from a broker-dealer to a bank holding company to gain access to the Federal Reserve’s discount window, a source of liquidity. In that time, there were internal discussions on how to grow the consumer side of the business.
In 2016, the bank made the first move in that direction when Goldman’s GS Bank acquired GE Capital’s online deposit platform. Building out consumer loan business was the next step. Goldman combined the two businesses under the Marcus name back in December.
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.