We’re likely just weeks (or days) away from the launch of Apple Card, which Apple has developed in conjunction with Goldman Sachs. During Goldman’s Q2 earnings call today, CFO Stephen Scherr offered details on the development of Apple Card, the risk associated with it, and more.
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As detailed by CNBC, Goldman Sachs has spent $275 million this year on its consumer-focused Marcus business, which includes Apple Card. In total, Goldman has spent $1.3 billion on Marcus as it works to expand its consumer efforts:
“Cumulatively, we are making substantial, organic investments to build new businesses and digital platforms,” Scherr said on a call with analysts Tuesday. “As these businesses scale over the coming years, this drag should not only reverse but become an accretive contributor to the firm’s [return on equity].”
As for what kind of return Goldman could see from Apple Card, Scherr said that it’s too early to speculate, but he noted that there is always risk in the consumer business. To account for some of that risk, Scherr added that Goldman has slowed growth in its consumer loan business:
“There’s no denying the consumer business — whether Apple Card or Marcus — is a risk business,” Scherr said. “We’ll continue to look at it on a risk-adjusted return basis.”
“We have slowed the increasing growth in that in contemplation of taking on increasing consumer credit through the card business,” he said. Still, Scherr didn’t provide any revenue numbers on Marcus said it was “premature” to speculate about what the pace of the Apple Card and loan growth might look like.
Going forward, Goldman says it will give investors a “strategic update” in January focusing on Marcus and offering details on return profiles for Apple Card.
Apple Card was announced back in March, with Apple teasing that it would launch sometime this summer. Apple today released the seventh developer beta of iOS 12.4, which includes the groundwork for Apple Card, and is the operating system being used by Apple and Goldman employees who are testing the card.