GS is closing easy access savings business to new customers in Britain from Wednesday after deposits surged near regulatory limits during COVID-19 lockdown.
The British arm of digital brand Marcus, which pays market-leading rates to savers starved of meaningful cash returns, has attracted about 21 billion pounds ($27 billion) from more than 500,000 savers since its launch in 2018. However, British banking rules demanding ring-fencing of retail deposits totaling more than 25 billion pounds have prompted its executives to take steps to manage its growth. “We’ve really seen our growth accelerate under lockdown as people hold off on discretionary spending and take time to reorganise their finances and get the best deal for their money,” Des McDaid, head of Marcus UK, told Reuters. Ring-fencing would require Marcus in Britain to become a separate legal entity with its own board and limit how much capital it could share with the rest of Goldman’s businesses. “Separating Marcus financially and operationally from Goldman Sachs would be a significant change to our low-cost business model, which allows us to pay consistently competitive rates to existing savers,” McDaid added.