Apple CEO Tim Cook introduced Apple Card at a launch event at Apple’s headquarters in Cupertino, California, on March 25, 2019.
Noah Berger | AFP | Getty Images
JP Morgan Chase an agreement was reached to take over the apple Credit card from original issuer; goldman sachsThe two banks said in separate releases on Wednesday.
The deal, completed after a year of negotiations between the parties, means even greater growth for the credit card and overall retail banking giant. JPMorgan will take over more than $20 billion in credit card loans in 2022 from Goldman, which has begun a shift away from consumer lending.
JPMorgan said the deal would take about 24 months to close and would record a $2.2 billion reserve for credit losses when it reports its 2025 fourth-quarter results next week.
The bank said customers will continue to have access to the card’s existing benefits and the card will continue to work on the Mastercard network.
“Chase shares our commitment to innovation and delivering products and services that improve the lives of consumers,” Jennifer Bailey, Apple’s payments executive, said in a release. “We look forward to working together to continue delivering a best-in-class experience.”
The deal further entangles JPMorgan with leading tech companies and further strengthens the bank’s reputation as a leader in American finance. Prior to this partnership, the company was already the country’s largest credit card issuer by purchase value.
For Goldman, offloading its Apple Card business will help CEO David Solomon get through a difficult chapter. Goldman entered the credit card business with much fanfare in 2019, beating out other issuers of the Apple Card.
“This transaction effectively completes our narrowing of focus to our consumer business,” Solomon said in the bank’s release. “We look forward to focusing on advancing the strategy we have developed for our core franchise and continuing to support our customers during the transition to a new issuer.”
Goldman said the deal would boost its earnings by 46 cents a share when it reports next week’s results.
last bank balance
CNBC reported in July that negotiations between JPMorgan and Apple had progressed and that JPMorgan would be the last bank in the deal after other interested issuers, including American Express, Synchrony and Barclays, pulled out.
At the time, people familiar with the matter said JPMorgan would only take on the Apple Card portfolio if Goldman and Apple were willing to make concessions.
JPMorgan appears to have succeeded in at least one respect. JPMorgan took over the Apple Card portfolio at a discount of more than $1 billion, said a person familiar with the deal, who asked not to be identified discussing confidential details.
People familiar with the business told CNBC that the portfolio includes more subprime and lower-credit borrowers than JPMorgan typically services. Apple wanted Goldman to offer the service to as many iPhone users as possible, the people said.
JPMorgan also plans to offer an Apple Savings Account as part of the tech giant’s suite of financial services. The Wall Street Journal first reported on the deal.
