The article doesn’t even get into exactly why Goldman is losing money on the deal.
I don’t understand how they could be taking such a big loss on those accounts. Federal reserve rates are above 5%…
Also, it’s hard to feel bad for the bank taking a billion dollar loss when they have like 1.5 trillion dollars in assets.
Sounds like someone doesn’t know how to run a bank. That’s ok though, Apple has plenty of money, a loyal customer base, and plenty of other suitors. I’m sure if Goldman is no longer interested that someone else will be.
The article doesn’t actually have any data at all regarding the savings accounts. It combines losses on credit cards with a pessimistic quote from someone at the launch of the savings accounts. The credit card losses also look worse than they are. Goldman Sachs definitely seems to think they made a mistake, so I don’t doubt they’re losing money, but the numbers themselves are primarily paper “losses.” They’re setting aside a huge amount of money for theoretical future defaults on repayment. My understanding is the numbers are extra high right now precisely because they’re brand new and haven’t previously been provisioning for future losses. I don’t know the exact numbers involved but it seems like they’re recording extra losses last year and this year that would cover several years of future losses (cynically, I’m just going to assume this is some sort of strategic tax dodge).
I would guess the savings accounts just aren’t bringing in as much in deposits and there are more small accounts and higher operational costs than they planned for.
There’s been no indication at all that the savings accounts themselves are unprofitable. This article combined a journalistically negligent misquote from a single person at the internal announcement of the savings accounts with fuzzy numbers about previous provisions for future losses from the credit card. If they had any integrity, they’d just delete the whole article.
The headline isn’t an accurate quote. 9to5Mac, quoting the Wall Street Journal:
When Goldman Sachs and Apple launched their joint savings account in April, Goldman held a town hall at its headquarters, where bank executives talked it up. One executive had a different message shortly afterward. “We should have never done this f—ing thing,” the Goldman partner told colleagues.
“Mistake” isn’t actually even part of the quote. The headline also implies that this is an observation made by looking back on it, rather than a comment made at launch by someone who may not have even been involved in the project.
Aw poor Goldman Sachs! Geez i really feel for them.
I was thinking the same thing.
I’m an Android user. Can I get an Apple Savings account too?
If you have an iPad you should be able to. Maybe even a Mac. But I don’t think you can get one otherwise.
So the more money I put into my Apple savings the more it screws over Goldman? 🤔
