Goldman Sachs Group Inc. (GS  ) plans to double its lending to ultra-wealthy private bank clients by 2029. This initiative is part of the bank's broader strategy to bolster its wealth management operations.

What Happened: Goldman Sachs aims to expand its lending to clients with account sizes exceeding $10 million, reported Reuters. The bank's private banking chief, Nishi Somaiya, revealed that the plans, previously undisclosed, are aimed at providing more loans for significant purchases, such as luxury homes and sports teams.

Lending is viewed as a strategic tool for Goldman Sachs to expand its services to ultra-high net worth clients, who have numerous lending options and borrow infrequently.

"We can provide them leverage often against illiquid assets if they need lending for an acquisition - home, hobby, another company, sports team - or want to use a margin loan against securities to invest more," Somaiya said.

Despite the lack of specific figures, the bank's private bank's outstanding loans were $33 billion in the first quarter, excluding other undisclosed commitments. Goldman's CEO, David Solomon, acknowledged the bank's previous lack of focus on lending to private wealth clients but expressed confidence in the bank's ability to competitively serve their borrowing needs.

Goldman's expansion into retail banking, although largely unsuccessful, attracted a surge of deposits into consumer savings accounts. The bank's total deposits jumped to $441 billion in the first quarter, with over 39% coming from consumer accounts, compared to $190 billion in total deposits at the end of 2019.

Why It Matters: This move comes after Goldman Sachs' decision to sell its consumer lending business GreenSky in 2023, and its subsequent reconsideration of its venture into consumer lending. The bank's change of heart stemmed from operational and financial challenges encountered since the launch of the Apple credit card and other consumer lending products.

However, Goldman Sachs has been making strategic moves to expand its private credit business, such as securing a $1 billion deal with Abu Dhabi's Mubadala to capitalize on the surging interest in the Asia-Pacific market. This latest move to double lending to wealthy clients aligns with the bank's broader strategy to diversify its business beyond trading and investment banking.

Price Action: Goldman Sachs stock closed 1% up at $448.70 on Wednesday, according to data from Benzinga Pro.