The news is part of Goldman Sachs' planned
Before being part of Goldman, GreenSky made point-of-sale loans in partnership with regional banks that included
Goldman Sachs is in the process of selling GreenSky to a consortium of investors led by the firm Sixth Street; the deal is expected to close early next year.
Once the deal closes, Synovus will be the sole administration agent for GreenSky, CEO Kevin Blair said at an investor conference Wednesday. Whenever GreenSky makes a new loan, Synovus will bring it onto its portfolio for a few days and then sell it to a third party — and reap a fee for those services.
The arrangement will "create an opportunity for us to continue to produce additional fee income," Blair said. The $59-billion asset company expects its GreenSky-related fee income could top $20 million next year based on the lender's current projections for activity.
Brandon King, an analyst at Truist Securities, was upbeat on the deal.
"We think the expanded relationship provides a low-risk source of fee income that should help improve SNV's return on equity," King wrote in a note to clients, referring to Synovus' stock ticker.
Under the arrangement, GreenSky would underwrite its loans to fit with Synovus' credit appetite and risk management policies.
Synovus will also see a one-time gain of $12 million this quarter and $5 million next quarter, since it's facilitating two chunks of loan sales that are currently on Goldman Sachs' portfolio.
Goldman's GreenSky acquisition was part of the investment bank's much publicized push into consumer lending, which included personal loans through its Marcus brand along with credit card partnerships with Apple and General Motors.
The efforts have
While it's selling GreenSky and sold its Marcus loan portfolio, Goldman's card programs with Apple and General Motors are part of longer-term deals. CEO David Solomon has said the company's focus is "managing them better, getting rid of the drag and bringing them to profitability." But