The US Federal Reserve is reviewing the operations of Marcus, Goldman Sachs’ online consumer banking unit launched in 2016, Bloomberg reported citing people privy to the development.

Goldman Sachs leadership has been subjected to questions and follow-ups by the central bank’s officials in this regard for many weeks now, with the process still ongoing.

Putting Marcus under the lens does not indicate any misconduct, stated the report, adding that the move is aimed at scrutinising a relatively new unit that is growing substantially inside a firm.

There was no comment on the issue from the representatives of the concerned parties.

Goldman Sachs has been trying to strengthen its consumer banking arm in order to lower its dependence on trading and investment banking revenues.

However, the pandemic impact, combined with soaring costs, as well as addition of new businesses are said to have taken a toll on Marcus.

The bank’s internal projections for this year, as reported by the publication in June this year, peg Marcus’ losses at over $1.2bn.

Besides, some of the top executives of the business have quit the firm recently such as ex-CFO Stephen Scherr, Omer Ismail who departed to join Walmart’s banking venture, and consumer banking veteran Harit Talwar.

To control spending and minimise losses, Goldman Sachs president John Waldron is now playing an integral role in managing the unit. 

The Waldron-led team admitted that the firm “tried to do too much at once,” and now eyes a narrower focus on consumer banking. 

Last month, the Consumer Financial Protection Bureau (CFPB) launched a probe into Goldman Sachs’ credit card business. The bank has credit card tie-ups with Apple and General Motors.

Analysts forecast a slump of over 40% in net income at the bank this year, driven by sluggish performance in several business lines, as per Bloomberg.

Meanwhile, the bank is now prepping up to restart an annual retrenchment exercise, which was suspended during the Covid-19 pandemic.