Goldman Sachs raises dividend 50% after major change

Goldman Sachs (GS) conscionable sent Wall Street a wide message: we're done experimenting with user banking, and we're doubling down connected what we bash best.

The concern banking powerhouse besides announced a whopping 50% dividend increase, raising its quarterly payout to $4.50 per stock from $3 conscionable a twelvemonth ago.

That's a bold determination for immoderate bank, but particularly striking fixed that Goldman simultaneously reported selling disconnected its troubled Apple Card concern to JPMorgan Chase.

The assertive dividend hike signals thing important: absorption believes the worst is down them, and the adjacent fewer years could beryllium exceptionally strong.

Goldman's determination to offload the Apple Card marks the last section successful what CEO David Solomon has called a "strategic mistake" - the firm's little and costly detour into user banking.

The slope struck a woody with JPMorgan to instrumentality implicit the Apple Card portfolio, a determination that really boosted Goldman's fourth-quarter net by $0.46 per share.

The slope released $2.48 cardinal from loan-loss reserves tied to the recognition paper business, providing an contiguous fiscal boost.

Related: JPMorgan Chase to instrumentality implicit embattled Apple Card program, Apple Savings aft Goldman Sachs retreat

It's a unusual twist: Goldman is getting paid to exit a concern that mislaid wealth for years.

The Apple Card saga started successful 2019 erstwhile Goldman partnered with Apple to motorboat a flashy titanium recognition card aimed astatine mundane consumers.

The transportation was simple: Goldman would bring its fiscal expertise to millions of iPhone users, opening a monolithic caller gross stream.

It didn't enactment retired that way.

• The paper concern racked up losses 4th aft 4th arsenic Goldman struggled with the nuts and bolts of user lending: fraud prevention, lawsuit service, and retail banking regulatory compliance.

• These are problems the steadfast had ne'er faced successful its century-plus past of serving corporations and ultra-wealthy clients.

Now that the Apple Card exit is astir complete, Goldman tin absorption wholly connected its 2 halfway businesses: Global Banking & Markets and Asset & Wealth Management.

While Goldman was cleaning location successful user banking, its accepted Wall Street businesses were printing money.

Equities trading gross jumped 25% year-over-year to $4.31 billion, crushing expert expectations by astir $610 million. That's superior outperformance successful a concern wherever beating estimates by adjacent 5% is considered a win.

The spot came from 2 areas: derivatives trading and equity financing.