Daily Review: Banks are Not Going Away – Marcus by Goldman Sachs Lent $2 billion to Customers

On trends – banks are still the masters of the financial services industry

Goldman Sachs’ Marcus is winning the personal loans arms race

  • Marcus is pushing an us-versus-them anti-fee campaign highlighting potentially predatory practices of online lenders like Lending Club.
  • As of late Monday, Marcus by Goldman Sachs lent $2 billion to customers.
  • Meanwhile, Lending Club has reported losses exceeding $200 million over the last six quarters; Prosper has lost $210 million since the start of 2016, despite various cost-cutting measures, and lost its unicorn status. Even OnDeck Capital, which focuses on small businesses, is struggling to become profitable, having reported losses over eight consecutive quarters. On top of it, the Cleveland Federal Reserve Bank laid into such companies in a report Thursday, calling online lending a predatory business requiring more regulation. Marcus passed $1 billion in loans this summer.
  • Marcus, which offers personal loans to consumers between $3,500 and $30,000, has obvious advantages over its Silicon Valley competitors: a household name brand like Goldman Sachs behind it, the ability to raise FDIC-insured deposits as a deposit-taking institution and deep relationships with institutional investors that purchase consumer loans — like Goldman Sachs, which helps fund Prosper loans and is effectively competing with its own customer.
  • Goldman sees a $13 billion lending opportunity with Marcus over three years, CFO Marty Chavez said Tuesday in remarks at the Bank of America Merrill Lynch Future of Financials Conference.
  • Since late October, Marcus has been pushing an anti-fee campaign scripted to show how frequently and commonly people accept fees without fully understanding why the fee structure is in place in the first place and perhaps even highlight the fee structures at competing companies; namely, Lending Club, one of the largest players in online lending with more fees in plac ...
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