Apple (AAPL) is said to be in talks with UK-based bank Barclays (BCS) to replace Goldman Sachs (GS) as its credit card partner.
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GS CEO David Solomon hinted at an early exit from the deal after the company reported bumper quarterly earnings, with the bank potentially signalling some retrenchment from its foray into consumer banking.
“We have a contract with Apple to run that partnership until 2030, although there’s some possibility that it won’t continue until that time frame,” he said during an analyst call.
Following this, Reuters revealed that AAPL is in talks with Barclays and U.S. credit card operator Synchrony Financial (SYF) as potential replacements. It has previously reported the tech giant being in talks with JPMorgan (JPM) over a credit card deal.
GS says AAPL Card Is a Drag
In its latest earnings release, GS said platform solutions, particularly the Apple card partnership, continue to be a drag on the firm’s overall ROE (return on equity), impacting short-term profitability.
Solomon said the Apple card dragged the bank’s ROE down by between 75 and 100 basis points last year, although it’s expected to improve in 2025 and 2026.
The card partnership, signed in 2019, was part of the bank’s attempt to diversify its revenue from its core trading desk.
But it’s not been a smooth ride. In October the pair was hit with an $89 million fine by the Consumer Financial Protection Bureau, which said the companies illegally mishandled transaction disputes and misled iPhone purchasers about interest-free payment options.
And in another sign the bank is dialling back its consumer finance ambitions, GS offloaded its General Motors (GM) credit card to Barclays in 2024.
Is Apple Stock a Buy or Sell Right Now?
AAPL stock has a Moderate Buy consensus rating based on 19 Buys, seven Holds, and three Sell ratings. The average Apple price target of $244.77 implies 2.9% upside potential from current levels. In the past year, AAPL shares have gained 30.2%.
