UPDATE 1-Goldman Sachs to buy mortgage lender Genesis Capital
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(Reuters) – Goldman Sachs Group Inc (GS.N) has agreed to buy private mortgage lender Genesis Capital LLC as the Wall Street bank looks to new businesses for growth with trading revenue remaining sluggish.
Los Angeles-based Genesis, which is currently backed by private equity firm Oaktree Capital Management LP, provides financing for real estate developers looking to buy, renovate and sell single-family homes.
Terms of the deal, which was announced by Genesis on Thursday, were not disclosed.
Goldman is grappling with ways to boost revenue as trading, its traditional profit engine, has slowed amid post-financial crisis regulations.
As a result, the bank has pushed more deeply into lending to both large corporations and consumers. In 2016, Goldman purchased $17 billion worth of online retail deposits from GE Capital Bank.
It also launched Marcus, its first major foray into consumer lending, and in July announced a new digital platform where customers of other wealth management firms can apply for loans.
Genesis was advised by Wells Fargo Securities.
Goldman Sachs was advised by Goldman Sachs & Co LLC and legal counsel was provided by Davis Polk & Wardwell and Mayer Brown LLP.
Reporting by Olivia Oran in New York and Aparajita Saxena in Bengaluru; Editing by Jonathan Oatis