Goldman Sachs’ encroachment into Main Street finance appears to be going well.
Its new lending platform, Marcus, which targets prime borrowers with credit scores above 660 is issuing out loans at a fast clip, according to a new report by CB Insights.
Marcus, launched in October 2016, is the firm’s first consumer lending platform. It offers no-fee personal loans of up to $30,000 for two- to six-year periods.
The CB Insights report, which dissects the investment bank’s broader strategy, shows Marcus issued $1 billion in personal loans more quickly than four other well-known financial technology startups, including LendingClub and Prosper.
“Marcus reportedly passed $1 billion in loan origination in its first 8 months and is expected to originate $2 billion by the end of 2017,” the report said. “While data on number of loans doled out is hard to find, Goldman reached its first billion in consumer loans significantly faster than competing online personal loan companies.”
Goldman is also positioned better in the retail lending space than other legacy banks, according to the report. “Another advantage Marcus has over other bank incumbents looking to launch a competing initiative is its non-legacy IT architecture and the fact that Goldman does not have an existing consumer credit card business for Marcus to cannibalize,” the report said.
The firm sees a $1 billion opportunity in the new offering, according to a slideshow presentation by the bank’s president and co-chief operating officer, Harvey Schwartz.
In the presentation, delivered at the Barclays Financial Services Conference earlier in September, the firm outlined how it will “prudently grow” its lending business. Marcus is part of a broader strategy shift by the investment bank, which is best known for trading and investment banking.
It has been expanding its retail footprint, launching GSBank.com in April 2016. GSBank.com offers customers a 1.20% interest rate on their deposits, which can be as low as $1, as well as 12 month- and 5 year-term CDs. The retail platform has $15 billion in deposits, according to the presentation.