Concerns have been raised about the number of subprime customers Goldman Sachs’ online lending business Marcus has lent to.
UBS says concerns are “overblown” and Marcus is the right long-term move for Goldman.
UBS also sees a rebound for Goldman’s FICC business which could provide a short-term boost to the stock price.
UBS thinks fears about Goldman Sachs’ lending business Marcus are overdone.
The Swiss investment bank said in a note sent to clients this week that Goldman has become a “battleground stock”, with bulls and bears largely arguing over the health of Goldman’s new online consumer lending business Marcus.
“We believe concerns over Marcus are overblown,” analyst Brennan Hawken and team wrote.
Goldman launched high-interest online savings accounts in the US in early 2016, letting people save from as little as $1. It followed that up with a digital lending operation under the brand Marcus in October 2016. Marcus crossed $2 billion in loans last November.
While the loan book is still relatively small within Goldman’s overall business, analysts have started to voice concerns about the fact that at least 10% of Goldman’s loans are to subprime customers. This has led to concerns that the bank could see higher than forecast losses on its …read more
Source:: Businessinsider – Finance