JPMorgan Chase has finalized an agreement to acquire the Apple Card from Goldman Sachs, which has opted to reduce its focus on consumer finance. The deal, announced by both banks, comes after a year of negotiations and will see JPMorgan assume more than $20 billion in credit card loans. This move will fortify JPMorgan’s status as the largest credit card issuer in the United States.
The transition to JPMorgan is expected to take approximately 24 months. The bank will record a $2.2 billion provision for credit losses when it releases its earnings for the fourth quarter of 2025. Customers will maintain access to the existing benefits of the Apple Card, which will continue to operate on the Mastercard network.
Jennifer Bailey, an Apple executive overseeing payments, expressed optimism about the partnership, highlighting both firms’ shared commitment to delivering innovative consumer solutions. This collaboration enhances JPMorgan’s relationship with a major technology player and further solidifies its position in the financial sector.
For Goldman Sachs, the sale represents a strategic shift following struggles with its consumer finance initiatives since the card’s launch in 2019. CEO David Solomon acknowledged that this transaction aligns with the bank’s goal to concentrate on core business operations. The sale is anticipated to boost Goldman’s earnings by 46 cents per share in its upcoming financial results.
Recent reports indicated that JPMorgan was the last available issuer interested in the Apple Card portfolio, having successfully negotiated terms that include acquiring the portfolio at a discount exceeding $1 billion, along with plans to introduce an Apple savings account.
Why this story matters
- JPMorgan’s acquisition enhances its dominance in the credit card market, indicating a shift in consumer finance strategies among top banks.
Key takeaway
- The transaction underscores a strategic pivot for both JPMorgan and Goldman Sachs, with JPMorgan expanding its reach in tech partnerships and Goldman refocusing on core franchises.
Opposing viewpoint
- Some analysts might argue that the takeover of a subprime portfolio could pose risks to JPMorgan, potentially impacting its financial health in the long term.
