JPMorgan Chase, already the largest credit card issuer in the U.S., is nearing a deal to take over the Apple Card portfolio from Goldman Sachs, people familiar with the matter told CNBC.
The banks declined to comment to CNBC. Apple did not immediately respond to CNBC’s request for comment.
Negotiations between JPMorgan and Apple have progressed as earlier contenders for the card including American Express, Synchrony and Barclays have fallen to the side, said the people, who declined to be identified speaking about the agreement.
A deal for JPMorgan to take over the Apple Card and its huge book of loans would further burnish the bank’s reputation as a leader in American finance. With JPMorgan-branded and co-branded cards, the Jamie Dimon-led company is the country’s largest issuer by purchase volume.
For Goldman, offloading the Apple Card business would help it move past a rocky chapter for CEO David Solomon. Goldman entered the credit card business with great fanfare in 2019 by beating out other issuers for the Apple Card.
But the high growth rates of the card, coupled with accounting requirements that forced it to front-load reserves for future losses, caught Goldman flat footed. Solomon, who was facing pressure from partners unhappy about the consumer business, made the call to divest the card business partly out of concern that loan losses would rise in a recession, according to one of the sources.
Goldman had $20.5 billion in total credit card loans at the end of March. The bank is also in the process of moving its General Motors card business to Barclays.
For Apple, JPMorgan would bring stability after years marked by high growth, but also regulatory scrutiny over how Goldman handled billing and refunds in the business. Goldman had signed up to service the card through at least 2029.
JPMorgan is seen as more disciplined than Goldman was in that it will only sign an agreement if concessions are made over how the Apple Card is serviced, among other sticking points, one of the people familiar with the discussions said.
The Wall Street Journal earlier reported on the advanced card talks.
