What Happened: The banking giant will reportedly pay nearly $2.5 billion for the acquisition of the card business.
Goldman reportedly beat Barclays Plc (NYSE: BCS) in bids and stands to gain access to more than a million GM card accounts with $8.5 billion in annual spending, people familiar with the matter told the Journal.
The New York-based lender and GM card issuer Capital One Financial Corp (NYSE: COF) have agreed on the broad terms, including purchase price, and the deal is expected to come to fruition in the coming weeks, as per the Journal’s sources.
The GM credit card business reportedly has about $2.5 billion in outstanding balances.
The purchase deal comes at a time when the COVID-19 pandemic has led to banks deferring debts of cardholders and are bracing themselves to face billions in potential losses in event of a cascading default on such debt, the Journal noted.
The Apple card, with $4.5 billion in outstanding balances as of June 30, isn’t the only partnership Goldman has struck.
GM customers can already buy food and gas from their vehicle's digital dashboards.
Price Action: Goldman Sachs shares closed 1.2% lower at $198.55 on Thursday and gained 0.3% in the after-hours session.
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