A broken boiler; a smashed fender; a bout of root canal surgery. Whenever life treats you badly, Goldman Sachs will be there.
Lloyd Blankfein, chairman and chief executive of the Wall Street bank, took to CNBC on Monday evening to talk about Marcus, the consumer lending business that the bank launched with some fanfare last October.
Quizzed by Jim Cramer, the host of Mad Money, Mr Blankfein said that the venture had so far been a big success, crashing through $1bn in loans originated and on course to hit $2bn by the end of this year. People had responded well to Goldman’s promise to save them “three, four, five hundred basis points” on the interest rates they were paying on credit card balances, Mr Blankfein said, while charging no fees of any description – ever.
“We did a lot of studying of this,” he said. “And we had a lot of sessions. We talked to thousands of people as we were developing this product. And I talked to consumers and users of this. And I’ll tell you, they’re really good people. Terrific people. They’re – who had a little, you know, rain in their lives. Or clouds. Or some need that came up. You know, have to repair a roof. Have to get work done on, you know, on your teeth or your kids’ orthodonture.”
Marcus – named after the bank’s founder – is part of a push by the bank to find new streams of revenue, as its core businesses are squeezed by tighter regulation, a shift to electronic platforms and patchy activity among big companies and investors. Staffed by veterans of consumer-focused companies like American Express and Discover Financial Services, the venture is going head to head with the likes of Lending Club and Prosper, the two San Francisco-based upstarts which have grown rapidly in recent years.
Mr Blankfein stressed that there “is plenty of room for us to make a great return on this,” noting that the bank was offering unsecured loans of up to $30,000.
“Of course, if it wasn’t beneficial to the consumer, we’d have no place in this and had no role,” he said.
“But we’re going to grow, you know, we’re going to grow this thing.”