We're probably only weeks or days away from introducing the Apple Card, developed by Apple in partnership with Goldman Sachs. During Goldman's Q2 earnings call today, Chief Financial Officer Stephen Scherr announced details about the development of the Apple Card, the associated risk and more.
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As credited by CNBC Goldman, Sachs spent $ 275 million this year on the consumer-focused Marcus business, which includes the Apple Card. Overall, Goldman spent $ 1.3 billion on Marcus to expand its consumer efforts:
"Cumulatively, we're making significant organic investments to build new businesses and digital platforms," said Scherr in a conversation with analysts. "As these companies gain in importance in the coming years, this disadvantage should not only be reversed, but also a positive contribution to [return on equity] the company."
Regarding the return that Goldman could expect from Apple Card, Scherr said that this was also the case early on, but he noted that there are always risks in the consumer business. To account for part of this risk, Scherr added that Goldman had slowed the growth of its consumer credit business: "It is undisputed that the consumer business – whether Apple Card or Marcus – is a risk business," said Scherr. "We will continue to focus on a risk-adjusted return."
"We have slowed the growing pace of increasing consumer credit through the card business," he said. Nevertheless, Scherr did not report sales for Marcus, it was "premature" to speculate on what the pace of the Apple Card and credit growth might look like.
Looking ahead, Goldman sees a "strategic strategy for investors ahead of update" in January with a focus on Marcus and details on the return profiles for Apple Card.
Apple Card was announced in March. Apple released today the seventh developer beta of iOS 12.4, which contains the basics for Apple Card. This operating system is used by Apple and Goldman employees testing the card.
For more information about Apple Card delivery, see our Apple Card Guide and our latest summary.
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