Mr. Solomon made the remarks while speaking at the Bank’s Investors Day.
“I’ve certainly reflected a lot during the last three years,” he said, referring to the bank’s consumer businesses. “There were some clear successes, but also some clear stumbling blocks.”
Mr Solomon did not immediately provide further details, although the language he used could suggest a sale to GreenSky or its card partnership. Less dramatically, this could represent some sort of restructuring of card agreements to make them more attractive to Goldman, or allow another bank to become an issuer alongside Goldman.
Goldman is exploring alternatives while it works to turn GreenSky and Kards profitable. If the latter occurs, it is possible that Goldman will not go through with the sale or other changes.
“We are focused on profitability, have the right strategy and will be agile and flexible,” Mr. Solomon said. “We have significantly scaled down our ambitions for consumer strategy.” Shares of Goldman fell 2% in early trading, underperforming other big bank peers.
Goldman, the icon of a Wall Street firm for generations, is struggling with its foray into Main Street banking. In earnings results released in January, the bank revealed that the Platform Solutions unit had made a loss of $3.8 billion on a pre-tax basis since the beginning of 2020.
The company said on Tuesday that it aims to reach pretax break-even in platform solutions by 2025.
Platform solutions include GreenSky and Card Partnerships – called the Consumer Platform. It also includes another business called transaction banking, which provides payment services to banks and corporations. The company said the unit is currently profitable.
His statements were a notable departure from Goldman’s last investor day in 2020. Then, the firm said it was building a pioneering digital consumer bank that would serve consumer banking and borrowing needs.
The stakes are high for Mr. Solomon. Many investors have become disenchanted because they believe Goldman hasn’t provided enough clarity about what exactly it wants to be. Some think Goldman’s efforts were too ambitious for a bank that didn’t have consumer lending in its DNA.
“It became clear that we lacked certain competitive advantages and we took on a lot very quickly,” Mr. Solomon said on Tuesday.
The prospect of a slowing economy, where overall delinquency rises and banks have to set aside more money for bad loans, also helped pull back Goldman.
Goldman Chairman John Waldron said Tuesday that consumer platforms are “significantly undervalued” due to reserves and operating expenses. He added that Goldman is “focusing on making the right strategic decisions … to ensure that we grasp all opportunities to unlock value.”
Goldman disclosed last year that the Consumer Financial Protection Bureau was investigating its credit-card business. The Federal Reserve is investigating whether the bank had proper safeguards in place as it granted consumer loans, The Wall Street Journal previously reported.
Goldman launched its consumer bank called Marcus in 2016. Mr Solomon was then a top executive, although he did not become CEO until 2018. The bank was looking to smooth out the up and down returns of investment banking and trading. , Customer deposits were another appeal as a stable source of funds.
Soon, a firm that used to make money work for millionaires will be running an ad featuring a suburban dad singing about his high-yield savings account. Almost from the outset, investment bankers and traders, accustomed to being the firm’s star, complained that the new consumer pressure would drain resources and damage Goldman’s brand.
Goldman and Apple announced their joint credit card to much fanfare in 2019, and the card was seen as a way for Goldman to broaden its appeal. This was followed by a partnership with General Motors.
But no more matchups happened. Credit card lending is highly competitive, and giants like JPMorgan Chase & Co. and American Express Co. are willing to spend heavily to acquire and keep customers.
Goldman did not acquire the card businesses of companies including Macy’s Inc and JetBlue Airways Corp, the Journal previously reported. Goldman recently decided to pause its efforts to acquire any new credit-card programs, the Journal reported, including ending advanced discussions to launch a co-branded card for T-Mobile US Inc. .
Goldman closed on its roughly $1.7 billion purchase of GreenSky less than a year ago. GreenSky is a lender that specializes in lending for home-improvement projects. Contractors and other people doing work on homes often extend loans to customers.
The deal had some skepticism inside Goldman, which worried about how the business would fit into the rest of the bank’s consumer operations, the Journal previously reported. Mr. Solomon wanted to show momentum in the consumer business, the Journal reported.
The Journal reported that last year was one of GreenSky’s best ever for loan growth. Goldman began bringing those loans onto its balance sheet six months ago, the company said Tuesday, a process that requires injecting more money to cover potential future loan losses. It currently has over $2 billion of these loans on its balance sheet.
Goldman previously said it was winding down personal loan originations. On Tuesday, the company said it is in the process of selling part of this portfolio.
Goldman’s plan for a checking account open to the public also fell through recently. As recently as this summer, Goldman executives were saying that the checking account would unlock new business opportunities for the bank.
Goldman appears to be fully committed to its consumer savings accounts. That business is involved in the Asset and Wealth Management division. Mr. Solomon said Tuesday that the unit is Goldman’s “key driver for growth as we look forward as a firm.”
Write to annaMaria Andriotis at annaMaria.andriotis@wsj.com