Jamie Dimon Collects Goldman’s Most Expensive Mistake with New Apple Card Deal…

Sloppy seconds be like… 

Goldman Sachs is officially done pretending it wanted to be a consumer bank, and Jamie Dimon just showed up to collect the evidence.

(Source: Imgflip) 

After years of navigating the clusterf*ck that is the Apple card, JPMorgan Chase has agreed to take over the Apple Card from Goldman Sachs. And if this deal feels less like a partnership handoff and more like DJ D-Sol quietly sliding his phone across the bar and saying, “Yeah… you can have her” then you are absolutely correct. In short, the bones say that JPMorgan absorbs more than $20 billion in Apple Card loans, books a $2.2 billion provision for credit losses, and takes about two years to fully digest the portfolio. The card stays on Mastercard, the perks stay intact, and Apple gets to tell users nothing is changing… which is exactly what Tim Apple wants.

(Source: CNBC)

Goldman, meanwhile, gets to close the book on its most expensive identity crisis. To be fair, Goldman didn’t fail at consumer banking because it’s dumb. It failed because it’s Goldman. The firm tried to graft a mass-market credit card business onto a culture built for IPOs, M&A, and telling sovereign wealth funds “no” with a straight face. Apple wanted inclusivity. Goldman wanted pristine credit. What they got was a subprime-heavy portfolio, angry regulators, and a CEO who looked visibly tired every time Marcus came up.

So DJ-Sol (read: David Solomon) gets to walk away, boost earnings by 46 cents a share, and tell investors this was all part of the plan. Meaning, he’s taking clean cut to a whole new level. As for Dimon, this is where the story stops being about Apple Card and starts being about the savage Dimon is. For context, JPMorgan didn’t chase this deal because it’s sexy. It chased it because JPMorgan is the only bank in America that can absorb a slightly messy, slightly subprime, slightly political credit book without flinching. Dimon doesn’t need Apple Card to work. He just needs it to exist inside the largest consumer balance sheet in the country.

(Source: Giphy) 

That said, Apple doesn’t partner with banks… it uses them. Whoever sits behind Apple Card gets access to hundreds of millions of users who don’t think in terms of issuers, networks, or credit underwriting. They think in terms of buttons. JPMorgan understands this while Goldman never did. That’s why JPMorgan reportedly took the portfolio at more than a billion dollars off face value. Apple needed a grown-up bank to do their bidding, and JPMorgan named its price on the toll. 

Zooming out though, this deal also quietly cements JPMorgan as the default financial infrastructure layer for American life. Meaning, when the recession hits, JPMorgan will be underwriting, servicing, and backstopping half the country while everyone else is arguing about rent. Aaaaaaand just like that, this deal reminds everyone why JPMorgan will be the last one standing. Until next time, friends… 

At the time of publishing, Stocks.News holds positions in Apple as mentioned in the article.