Marcus from Goldman Sachs Surpasses 2017 Goal

EXCLUSIVE- Online consumer lender Marcus by Goldman Sachs has reached its annual goal for loan originations.

Martin Chavez, chief financial officer for Goldman Sachs, showed in a slideshow at a Bank of America Merrill Lynch event yesterday that Marcus had already surpassed $1.96 billion in originations as of Nov. 9.

“We actually crossed $2 billion last night,” he said at the presentation.

What that means is that from Nov. 9 to Nov. 14, over a span of five days, Marcus originated more than $40 million in loans. Harit Talwar, head of Marcus, had predicted at the Money 20/20 Conference in Las Vegas last month that it was likely the company would reach the $2 billion mark by Thanksgiving.

Chevez also said that Marcus sees a $13 billion consumer lending opportunity over the next three years, and can achieve a return on equity in the mid to high teens over that timeframe.

Marcus’s story is a far cry from rival online lender Lending Club, which with its fourth quarter guidance last week sent shivers through investors causing its stock to drop 22% within hours of the earnings call. Marcus, on the other hand, hopes to contribute as much as (if not more) than $1 billion to Goldman’s revenues over the next three years.

Founded a year ago, Marcus currently has two products. One is its fixed-rate, no-fee personal loan. The second one is its online savings account, which yields 1.3% interest.

According to Chavez’s presentation, so far this year, Marcus has originated over 133,000 loans with an average amount of $15,000 over an average tenor of four years. The loan has an average APR of 12%.

“Importantly, when you think of our APR relative to peers, remember we have no 0% promotional balances and no transactor balances, so 100% of our loans earn interest from Day One,” he said.

In its third quarter earnings call, Goldman Sachs pointed to Marcus as the foundation for Goldman’s larger retail banking plans. Looks like that foundation is becoming solid with each quarter.