Less than two years ago, when Goldman Sachs Group Inc. still aspired to someday dominate retail banking, the Wall Street firm roped in Silicon Valley veteran Peeyush Nahar to lead the effort.
(Bloomberg) — Less than two years ago, when Goldman Sachs Group Inc. still aspired to someday dominate retail banking, the Wall Street firm roped in Silicon Valley veteran Peeyush Nahar to lead the effort.
Now, with that goal abandoned, he’s exiting the firm and will take on an advisory role.
The departure, announced to staff Friday, is the latest fallout from Goldman’s unwinding of the mass-market business nicknamed Marcus. The former Amazon.com Inc. and Uber Technologies Inc. executive joined in 2021 and was the last person assigned to run the unit before its breakup. Goldman had hoped he could salvage the effort by using his technical know-how to leverage partnerships with outside firms with ties to tens of millions of Americans.
Key pieces of Marcus have since been folded into a new division prosaically dubbed Platform Solutions, where executives say their No. 1 priority is achieving profitability. The money-losing segment includes Goldman’s credit-card partnerships, installment lender GreenSky and a business that attracts corporate deposits.
The bank drew attention to Platform Solutions last month by attributing $2 billion in losses to its components in 2022, even though they produced only 3% of firm-wide revenue. Goldman is hosting an investor day Feb. 28 and has said it will update shareholders on progress in improving results in that unit.
Behind closed doors, executives have debated whether to publicly set a target for Platform Solutions to break even by 2025. They’ve also floated committing to bringing losses below $1 billion this year, but some see that goal as unrealistic. The bank had previously projected its foray into Main Street business lines would break even by 2022. That proved unrealistic.
Nahar’s departure and the internal conversations were described by people familiar with the matter, who asked not to be named discussing confidential talks. A spokesperson for Goldman declined to comment.
The bank might still cast a net to recruit someone with expertise in running large credit-card programs and will look to scale up its existing card partnerships to help propel it toward the break-even goal, one of the people said.
Goldman executives have blamed accounting rules, which require setting aside money for potential future defaults by borrowers, for inflating reported losses. Last month, Chief Financial Officer Denis Coleman cautioned that “the vast majority” of provisions were attributable to existing account balances, not new originations. “That’s also something that we’re going to watch very carefully as things develop,” he said.
Exit Door
Nahar was the last in a string of executives recruited to make Marcus work.
Goldman had jumped into the digital-banking venture by enlisting Harit Talwar, a consumer-finance veteran with extensive stints at Discover Financial Services and Citigroup Inc.
It then tapped company lifer Omer Ismail to run the business, but he abruptly left to run a fintech venture backed by Walmart Inc. David Stark, one of his top lieutenants at Goldman, joined him there. Stark had worked on the Apple Card relationship and had a long run at Citigroup before that.
Another lateral partner hire for the bank, Swati Bhatia, who was running the direct-to-consumer business, also left after the bank gave up on that part of the business.
It’s rare for Goldman to hire partners from the outside and rarer still to lose two of them in rapid succession.
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