Goldman Sachs to Buy General Electric Capital Bank's Online Deposit Platform

Goldman Sachs, the US based investment firm, is broadening its efforts to offer banking services to people with a wider array of incomes than it has traditionally served. On Thursday, the firm announced about its plan to acquisition of General Electric Capital Bank's online deposit platform.

The American multinational investment banking firm said in a statement that the acquisition will result in shift of $8 billion from GE Capital Bank to Goldman in online deposit accounts and $8 billion in brokered certificates of deposits.

“This transaction achieves greater funding diversification and strengthens the liquidity profile of GS Bank by providing an additional deposit gathering channel”, said Goldman treasurer Liz Beshel Robinson.

GE said in a statement that the move is part of a strategy to scale back its finance operations to focus more on industrial operations. The shift comes as large financial institutes face stiffening regulatory requirements.

Keith Sherin, GE Capital chief executive, said this transaction is another key step and will advance GE Capital's new strategic direction by facilitating closure of one of our two US bank charters, which they believe will help them to become less systemically important.

Historically, Goldman has been an investment bank catering almost entirely to corporate clients, with a small business offering private banking services to the wealthy elite.

During the financial crisis, Goldman was forced to convert to a bank holding company. Since then, Goldman has slowly been trying to take advantage of its new classification, which also allows it to take deposits and lend money.