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Goldman Sachs’ approach to online customers

With the completion of General Electric’s sale of its GE Capital subsidiary to Goldman Sachs, GE Capital Bank is now called GS Bank, with the investment banking firm taking the great leap into online deposits in its increasing efforts to attract consumers in addition to its core business.

“This transaction increases the funding diversification and strengthens the liquidity profile of Goldman Sachs and GS Bank,” said Robin Vince, treasurer of The Goldman Sachs Group, Inc. “We are pleased to add the capability for accepting online deposits, a strategic priority for the firm and for GS Bank.”

GS Bank, chartered in New York State, has assumed approximately $16 billion of deposits as part of the GE Capital deal, along with GE Capital’s approximately 140,000 retail customers. The company’s new website, gsbank.com, currently offers online savings accounts (with rates of 1.05 percent APY) and certificates of deposits with terms from six months to six years.

Besides trying to attract consumers, the website is also looking to draw small businesses – a group that previously had been fairly anathema to the Wall Street titan. A video on the home page promotes its “10,000 Small Businesses” program, which it says “provides access to education, capital and business support.” Online calculators and in-house articles offering tips and other investing information are also available.

“We are committed to providing our new online deposit customers the high level of service they have come to expect,” said Esta Stecher, GS Bank CEO. “GS Bank will continue to offer smart, simple savings products backed by the skilled and knowledgeable team joining us from GE Capital Bank.”

For all the bright talk, Goldman Sachs itself has been taking financial hits for the past several quarters, with CFO Harvey Schwartz fielding sometimes sharp questions from analysts and investors in the wake of the company’s release of its disappointing first-quarter results. The quarter’s revenues of $6.34 billion were reportedly the lowest for any first quarter since CEO Lloyd Blankfein took charge in 2006.

Schwartz told the group that Goldman remains committed to being flexible in its approach to a fast-changing landscape. “If we felt like there is a client segment or transaction we could do that would benefit our shareholders and we could deliver to those clients, we would do it,” he said. “We’re open-minded.”


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