December 3, 2008 / 6:01 AM / 10 years ago

Goldman mulling Internet banking operation - WSJ

Dec 3, (Reuters) - Goldman Sachs Group Inc (GS.N) is considering launching an Internet banking operation, The Wall Street Journal reported, citing people familiar with the situation.

If the former investment bank goes ahead, the new unit will seek deposits that can be used to fund various businesses now that Goldman is a bank-holding company, the paper said.

Goldman executives have not ruled out buying a bank with substantial retail operations, the paper said, citing people familiar with the discussions.

The company could not be immediately reached for comment.

The possible online bank hasn’t been named yet, and many details of its operating plans are undecided. It is likely to offer a range of savings products, such as certificates of deposit, people familiar with the matter told the newspaper.

In addition to an Internet bank, Goldman executives are weighing the possibility of seeking deposits through the firm’s vast wealth-management operation and from large corporate clients, the Journal said.

Such corporate and institutional deposits are closer to the core of Goldman’s overall banking strategy than retail deposits, the newspaper said.

Goldman and rival Morgan Stanley (MS.N) converted themselves to bank holding companies after investment bank Lehman Brothers LEMBQ.PK filed for bankruptcy in mid-September as the global credit crisis deepened. (Reporting by Pratish Narayanan in Bangalore; Editing by Kim Coghill)

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