The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Goldman Sachs’ retail bank is alive and well

After a furtive foray in insurance they had to back out of and some CDs floating in the market, GS has bought over deposits from GE, taking on a new avatar as an online bank apart from a lending business for online lenders earning 8% NIMs proved the advantage of retail funding regardless of the rates environment.

Breakingviews: Goldman bets on the bank, Thomson Reuters: Reuters Insider
http://reut.rs/1fc1H90

Reuters’ breaking views:

Goldman Sachs has agreed to buy GE capital’s online banking platform and sixteen billion dollars of deposits. Now this deal, on one level he seems to make some sense but it’s also swapping one too big to fail risk for another.  Well let’s look at why it’s a good idea for Goldman to do. Since the financial crisis everyone has been worrying about how to fund standalone investment banks so those that usually rely on wholesale funding (bond markets).Right, capital markets. But the more deposits you have, the less you rely on Capital Markets funding

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This entry was posted on August 14, 2015 by in Uncategorized.

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