GS - Earnings call transcript Q2 2020 | The Goldman Sachs Group, Inc.

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Operator

Good morning my name is Dennis and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs Second Quarter 2020 Earnings Conference Call. This call is being recorded today July 15, 2020. Thank you, Ms. Miner, you may begin your conference.

Heather Kennedy Miner

Dennis. Thanks, morning. Good Kennedy Sachs. Heather of Relations Investor This Miner, Goldman at is Head Welcome call. earnings quarter to second our conference Today we our will be found reference our earnings the Relations presentation Investor page of website www.gs.com. on at which can on release presentation. earnings information on and forward-looking measures non-GAAP No appear and the statements This cast Inc. material Goldman Sachs of audio the copyrighted Group, is duplicated, be not without may or rebroadcast our consent. and reproduced Today Chief Financial our David Solomon, I'm joined and by our Stephen Chairman Scherr. and Chief Executive Officer, Officer the reviewing second and by performance. start will David first quarter half growth update an the on provide initiatives then strategic and economic key will backdrop. He macro several David discuss will strategy. address diversity also the firm's our to commitment and office return to Stephen recent second then test detail. quarter and will our discuss the greater results in stress will following be Stephen take to their and your remarks. questions David happy the pass over now call David. I'll to joining this David this call David? Heather, everyone Thanks, Solomon morning. and thank for you, that global your safe family crisis. that us by like Goldman at would unprecedented hope remain and start to this you, health I friends during all of your healthy saying and Sachs

franchise review per one return $XX.X Let client results. billion of Page of ago. of me versus second billion, begin up revenues In The on presentation net XX% of breadth a $X.X our earnings and we was net earnings on delivered of and XX.X%. the year quarter XX.X% evident of we our as a and of on solid equity equity financial $X.XX, quarter, produced return strength share to the this tangible

credit expenses, provisions Our results litigation higher in our the and incurring strong, quarter of while which were both even impacted returns.

Litigation higher and XXX Returns solid billion, X%. cost for an half also $XX basis net $X.X billion losses. contributed build of and our approximately results impacted of were by first to X.X% earnings of quarter first by credit points. half burdened second revenues reserve XXXX returns Our ROE of ROTE

volumes business driven choice advisor position table maintained performance banking counter for second making was clients quarter and significant pick and and equities of a extraordinary to in behalf our sheet across volumes in issue lead market. strategic share. underwriting the of of to FICC both our of intermediation as the We our markets, and by We enabling leading of cyclical us levels risk new clients and equity balance our high strong expertise our market activity, debt client diversified market demonstrated on with on strength The in a our point delivered exceptional activities. and investment performance up volatile positions

generated In to investments; harvest and appreciation deposit our provide we and market experience advice our private to another the from the to from positions consumer management gains continue We continue portfolio first public of asset credit our equity growth. recovery high-quality solid wealth clients quarter. management quarter recognize in partial and

an and maintained with Importantly, highly a stress. levels capital of position high economic strong we then liquid and market improving and volatility sheet balance

operating Page the to Turning two. environment on

brought macroeconomic We an on global by are uncertain health navigating extraordinary crisis. backdrop

the continued During the certain forces, and reopen. recent central negative began optimism and second as by from business and positive market support governments counterbalanced economies reflecting to banks quarter, challenges economic near shutdowns, both related we to experienced term

banks central the banks our opening today, for and expected activity unclear. contraction with in due governments, expected months the action improved These expectations call, global deeper April today three and central XXXX U.S. to the past part forceful of fiscal have expected tempering than notable of rebound ongoing providing by governments says improvement, a retail of June than X.X% decline expected for trough. economic decline in half deeper That and to to remain we stimulus. corresponding been resilience, the in X.X% the improvement a small in on rapid a key second are global quarter, expected X.X% XXXX are the seeing an as deteriorated from no The However, liquidity the actions indications including in and recovery prospect many to three for from ago. in early market second which in a more reflecting virus. rebound numbers of impact better in economic GDP exceptional faster sales governments approximately levels by May. from April In basis, steeper estimates growth the a United today, XX% economists we consequences Since by U.S. XXXX unemployment speak elevated in X.X% and a to expectations of XX% states economic States, is for our earnings and driven contraction

assess the experienced we markets the and its assets. valuation of in potential the the virus risk the rise in consequence, quarter second As impact economic of

rallied the second XXXX. quarter quarter marking XX%, S&P by XXX since best the its During

While the basis during assets, equity strong client yield rose amount, of demonstrate global the of spreads XX by financial levels credit moves and In high breadth tightened markets this roughly engagement XXX points tightened investment second a basis by and franchise. these the the context over broader of in similar quarter strength spreads points our quarter.

progress the and first initiatives. transaction clients our from the U.S. hinder not challenges global below most service banking sheet in of prepare XX, moment, we the remotely. assessment unexpected economic forward shifting We on maintain serve budget remain officially we risk. we half we our financial continue risk key June of for of to On volatility agile As our launched as continue challenges and on-time clients. launching for valuations and to XXXX profile to I overall prolonged platform pleased work go to and in our did a look home the our our with Pivoting of our to we as despite managers, that beyond am a market growth balance strong team note

have begin will billion become their XXX we of time. many over utilization on over the the end, expect quarter of begin of $XX as and utilize As deposits, platform which -- clients to operational platform we clients in

provide driven of West called new today fund investing. We believe part receptivity critical Street to in strong. Second, and marketing the strategy Client opportunities need. very to capture credit Strategic private has in been fund as of in the financing companies Solutions a accelerated the is well-timed to alternatives, transition we a market our

highly of approaches global the differentiated, Our sourcing Goldman Sachs. capabilities leveraging broad

Goldman pension investors relationships our These virtual institutions via to efforts week, this meetings. in billion of commitments. will before. the of partnered to have Just strategies an fund most over first as impressive months. expect we we expanding excess in funds base launched. be less coming XX that entirely is Sachs leading helpful broadening What We're when have additional include our days $XX close client are Ultimately, raise billion that occurred $X closed with not is and to our than

less intensive, recall of Investor strategy more to part be driven will was model our this investing platforms. toward discussed capital promises January that our initiative and You move in in our Day a for fee in significant

expect Third, current We virtual under business another This Fourth, under in customers. health partnership, which said more their third-party in referrals communication opportunity, credible inventory continued growth. with to and our billion support business, we scale establishing digital is we financing we net deliver XXX of we've would consumer example smaller to underwriting with wealth offering and flagship us a partner only small Year-to-date, on announce net which clients. accelerate partnership in supervision management. shared allow personal to wealth relationships management, new private high our high assets moment were we as innovation new representing to to net between our will our is client rebranded worth operational $X.X business, our with to sellers our to the environment leading worth ultra business. provide worth personal now Amazon expand management this a our lending platform corporations serve using challenging, That to our Amazon, generated to value to proprietary progress have pleased and we data to launched financial financial being normal leverage continued digital our is new recently integrate circumstances. high differentiated ability which over at decision management by

with financing our included credit card point of Our consumer sale partnership JetBlue, course, also of with a engagement recent Apple. and

priority to face lot many for many Stephen, six weeks, as a challenges over I've others past on time so focus I of and personal would about turning on listening and is we which a spend like of equity. the racial and a a a spent years. Like the moment mine for nation Before the diversity critical to inclusion firm learning

imperative While We global that unlock including be. Goldman we and Sachs need has diverse ethnicity, economic serve progress. we're diversity a inclusive and orientation. as we inclusion, long race, advance sought aspects to we sexual still make to a marketplace in gender and full There's organization is our moral potential, a and diverse that be must both all where not to

to The our work the and to return and major resiliency business clients, has serve our seamlessly our in while our our business of globally. strength employees demonstrating strategy, review our me of continues our of majority resiliency. offices technology begun let dedication people, Lastly, the office the which firm remotely, vast

from manner. Our where office are steps firm a together, safe so we communities we necessary return we and gradually a oriented to benefit of culture reopens, being has apprenticeship each and had to the in working always taking as team operate the

in Europe, Hong U.K., where Recently approximately from returned of progress are also on following up New office. colleagues. small employees We of team York, and the our lead Kong the back in group returned XX% We're approach employees of a office. using the XX% in continent We're a are in working to the in Asia office. XX% split with to have making our we're

adjust by our will progress be circumstances and region forward, dictated needed. will as in Going we each

precautions through as new we're business it's distancing. including not many ensure taking and tangible are And progress. but making forward We certainly social to safety usual, masks

health just the our prudently proud Sachs. tirelessly of Stephen. priority. over engage will I clients, I leverage resources. Goldman continue to am turn our technology In of and people closing, manage our top like and it that, time keep They these of steps, to our worked insert to and take we would As the to risk serve With safety I'll during people financial resiliency say to and this our as we have how

Stephen Scherr

you, Thank morning. good and David,

summary begin Page results on me with three. Let our

the investment asset hedging from equity managing in During we exceptionally and investment banking debt the repositioning classes. our raising quarter, markets, in across performance clients market very were risks second capital active sheets, strong a global and portfolios balance saw segments, as and

our were we consumer net We in gains and by three versus also ago. a revenue segments as businesses. on smaller growth wealth, asset private saw continue year-over-year consumer in segment, year management these Gains our a our and offset to given across investments wealth management expand equity partly a worth high segment decline

buffer capital spend results, results. Reserve the disclosed Federal for XX, to firm, Sachs recent I turning which Federal the a for of Reserve's light equity indicative effective on a segment stress we Tier-X implies stress October in common want to June XX.X% particularly requirement estimate minute X. Before test capital, On Goldman X.X%, of the of

just than than of of ratio anticipated, is reported our higher CETX higher While standardized June requirement slightly XX.X% XX. this as

accretive business and But our rule we pursue to our Reserve's requirements and Furthermore, preferred, complying started XXX continue our where by is for dividends fact, for all the basis capital ever will will basis large clients. we points otherwise banks, ratio purchases our this effectively permissible we the of it the year, as maintain return common deploying to to ability longstanding quarter. now quarter our third is XX of extend currency will Consistent intention of to into shareholders than balance with SCB manage with practice our In and CETX both the our while capital to points environment. sheet Federal higher returning our suspension implementation. it improved our mindful deploying to and this upon demonstrating the while

stress few As past the over contracted of that important than in months. global unemployment test experienced test, results bear scenario. contemplated the we industry firm U.S. severely levels actual the an economy The like adverse hit Federal is to Reserve's sharply consider and stress the the mind higher it the in the in

serve stronger financial quarter strength of levels producing of And stress, and capital. period, despite continues returns this robust to from liquidity our shareholders. emerged competitive the with a position for attractive clients firm the from the we the and maintained and second objective During of and

results. intensity the mix XX% only at Looking not CETX forward, term stress of strategy our scenarios our models. on near range a higher do is but and We to target for Day firm and of results business medium of control Federal the term appropriate capital Reserve's reducing is focus a the on provided executing basis, serve reaffirm outlined we to the Investor the the our Day believe in importance that test balance standardized at recognize our with we light requirement diversifying the But sheet. XX.X% to capital Investor stress continue

is our this As advancing. strategy of execution David highlighted,

we We just or maintained in With have the Investment quarter revenues. billion our capital billion which of implications $XXX announced diversify have industry. investments sell last on $X and number $X.X and by remain million that, nearly year, with We sold consistent closed including agreed XX% announced transactions with we balance announced business week, financial will a second considerable deals and net closings sale for our remained XXX capital ago, completed turn down or in and year Banking. but rankings equity revenues table year-to-date, of XX% in positive volume. $XXX of sheet. revenues up transaction M&A, of versus versus Global margin. a Atlantic to healthy, let's more for billion amid business now the Banking produced last billion participated efficiency as deal to position committed of nearly beginning durable four, advisory one both $XXX Investment grow Page league over Year-to-date, performance fewer We our of

announcements remained available M&A a In M&A continuing Investment recent year, pickup last second position those That interactions watching up XX% of those over for have with potential we will very client the Banking for remain influence of Dislocated half, will well a capital outcomes. said activity, active dynamic. by political versus client are challenged and significant asset from the as from home deployment. While both as coming companies macro uncertainty amount strength, the slowed, notwithstanding dialogues will in as from work our help private the and prices drive relevant opportunities environment.

declined from four reopening grade revenues finance record year of yield were activity, where $XXX ago, underwriting ranked debt we have grade complex particularly record delivered market client $XX volumes globally shares broader number billion years over number is the matters. franchise. yield Sachs, clients strategic Convertibles a headline record IPOs, and the market million underwriting Goldman had driving for seen these last quarterly turned one $X.X the of have up months several and underwriting, we more billion, our XX% the innovative for as XXX more announcements issuances. we We supported in as in as have In M&A turbulent number we shares in one. In in and In As financings net equity high banking quarter product debt this help investment deals. investment markets, investment quarter, increased the market. follow-ons net high investment was our crisis globally, increase volumes underwriting. focus in saw also a of global execution and to activity where we to amidst across U.S. ranked and strong Since of of private hit, equity the ranking performance underwriting, year-to-date, many our This volatility our our in across revenues jumped underwriting. than the

corporate of pace significantly banking execution the lending the discussion of investment recent Revenues of be $XX decreased period, versus were slower from hedge our the and out may to $XXX also has of important replenishment. indicator for forward deal This financing both of therefore, incomplete million first is function quarter. execution, from this to is It in moment activity, reflecting and Given an notably the point a backlog activity. volume in backlog negative that the million timeline our shortened losses.

single maintain larger risk lending certain relationship management For we hedges name on purposes commitments.

of The totaling pay billion also quarter reduce financing relationship clients we commitments the we we million lending, markets. access strong book. during to With the in commitment the deals gain hedge underwriting meaningful net $X in as our issuance help improved the also draws a saw corporate we As and market enabled of reversal reverse downs to quarter. tightened $XXX credit respect saw conditions the us last much quarter, in spreads capital

we including the thereby syndicated financings, to $XX and acquisition firm. €XX reducing for For successfully billion for billion exposure example, T-Mobile, [indiscernible]

considerable where quarter. client was continued and market wider by and from experience the strong as five, global business performance. activity, continued The risk franchise with market billion scale amid the the ask bid spreads in our revenues global continued investment strength management benefited performance. volatility. Net commitment were share and model driven markets classes client a to asset across expanded quarter we higher $X.X second to in strategic Growth bolstered business on in Moving Page significantly

increasing Turning to six. engagement distressed FICC as last high saw all five with revenues and financing year. tighter elevated FICC well broad from Page In in benefited businesses In and flows yield bank of loans intermediation, increase by client on strength driven increase bid volume. XXX% versus was and high as last were margins, $X.X amid credit, revenues. based grade, client performance wider year intermediation spreads investment versus growth issue and new XX% across our in our ask credit we Net billion,

another currencies, also Revenues and market activity and making for success including and all leading utilization rates continued very and banks volume solid higher corporates, a quarter We client to engine saw clients. active for In business. trading, Europe. pricing improved the volatility automated bond a in electronic systematic as in market higher high Americas hedge the through fund significantly we with among higher had share

performed Our by offset lower aided strong volumes. bank and is businesses, of on global levels volatility natural trading, on oil, volatility, and in metals. significantly rates improved including well activity was across strong performance loan stimulus. In revenues net strength mortgages, high partly our gas coordinated volumes and trading non-agency all agency trading trading franchise In of client central commodities, elevated high amid and also normalized by

and across structured financing, Lastly, saw we in considerable credit. FICC repo strength

were second net volumes. broad board up systematic electronic in million of leverage fund and tighter weakness cash year $X.X and and client year-over-year, XX% XX% wallet for clients. billion financing XX% dividend multi-year as equities, rose for in amid cancellations. quarter ETFs, $X.X the our trading passive in aided saw base ago. we average the executed net to recent share. elevated reflects of revenues revenues spreads, of We robust driven a lower to Equities scale and derivatives $XXX by hedge intermediation by active, Equity balances across versus revenues expand given performance This making, and our Europe a client declined strength efforts commissions, market billion Turning

across to technology Finally, enhance straight markets, we through continue global experience and to in invest platforms processing. user

We also on client ever our through platform the external with our saw activity continued high April. levels engagement of highest in second marquee quarter

Management seven, second revenues quarter, $X.X on Asset down the to versus Moving now a ago. in generated Page billion XX% segment we of year

a balance full across spectrum reminder, that activities. this liquidity platform classes, clients of includes segment on well sheet asset as As alternatives, serves a our from own investing as to our

roughly in positions. of given Equity gains, we of specifically the recognize of of portfolio million million positions, and of our equity portfolio, approximately rebound value growth and net an $XXX last we impacted U.K. offset of related higher strategic in the five which our More ago, over as As XX% our David years. $XX $XXX in across by on million size expect clients million Sprout gains mentioned, year student Asset assets second Australian gains equity to of sale gains by negative Avantor X% both certain $XXX and of gains to the our other including and under million sales and a center, broader including housing quarter, data Despite equity XXX fees the produced time performance grow driven portfolio. asset These public and third-party generated investment public significant to we various a offset Management aided initiatives. driven mix this private reduced liquidity we versus significantly billion past on investments over AirTrunk part $X.X we by investments. by segment totaled approximately $XXX gains, relating better investing by portfolio, products. public Management in COVID the up other announced $XXX On broader our supervision, billion recent event the in quarter. marks were million of from

This their our private quarter companies by portfolio saw impacted approximate performance XX% COVID-XX. equity in of

also Lastly, the had we million investment our consolidated in to private related of positive equity revenues entities $XXX portfolio.

$XXX debt income, spreads, the net activities XX% and with approximately from remainder debt Finally, lending which and fair quarter. Asset reflecting gains net million, revenues million include on investment from nearly were taken loans, credit the from in last securities $XXX Management of interest tighter losses retracing value

where of sheet. Let our transparency provide diversification and the me on Page further asset we eight, now turn to management composition balance

of vintage. left the investment we sector, our this out by On slide, and geography equity show broken portfolio

which of also the new X% our billion investments to billion only the on We show At the comprised are of finance non-recourse we debt. the and predominantly $XX with real provide are bottom hospitality. portfolio the $XX detail by of slide, portfolio diversification CIEs. sector primarily These of to of retail estate related X%

includes and of debt estate secured side comprises XX $XX reflect geography. portfolio, right loans predominantly investment and loans securities. further billion corporate $XX debt down these lending sector classification, slide, the corporate billion break and investments. of billion debt by which This and portfolio are On accounting We the amounts that real we our of and

the year questions disclosure turn of ago, up this management and X% in this will to refine Management to continue revenues community. versus Page nine. on will driven to In revenues. higher consumer a billion from $X.X we second be and produced wealth now Consumer Wealth to quarter, responsive by segment, investor higher We assets banking I the

year balances Marcus prior the last $X growth reflecting Card. quarter, XX% were rose $XXX year, approximately $XXX other rose quarter, of at across under versus banking growth were from in reflecting loans roughly billion, the year, Consumer XX% of and management credit Funded which fees at $X $XXX end the billion totaled in $XX from acquisition, revenues second wealth of the XX% organic Consumer loan the stable Capital supervision last $X Apple to million deposits billion. billion versus higher card lending. billion and U.S. For from versus the consumer reflecting assets and United rising income in $XX interest quarter. remained net billion quarter U.K., million

We prudently budget and these growth relative to risk continue estimates. to manage moderated have portfolios initial

client billion quarter let's versus in to $XXX firm first supervision. our supervision. up a Now the we assets wide XX, trillion, assets This under in to for first and the increased turn assets exceeded $X.X trillion billion which nearly $XXX Page year approximately ago. marks quarter Total $X under versus

Total was improvement was across of sequential an second and interest net portfolio market lower $XXX appreciation for lending liquidity a ago, billion net income inflows. all $XXX billion long-term segments. driven firm of liquidity of interest wide versus income Our by million On and inflows sequentially amid we and our rates increase down billion year address and pool. $X XX, $XXX quarter, Page in our the

I as results noted to traditional our as banks. and rates lower a have previously, many than Importantly, overall firm, are sensitive interest less

if rates mix rate turnover floating hedge and sensitive, to stable, sheet asset balance or interest over high of modestly consumer our given rate our expand time gradually NII assets, remain liabilities, our reprice. as While deposits floating is expect we

review firm. credit loan let's across and growth Next, the performance

Our pay downs total earlier. on we was revolvers billion, $XX noted saw quarter down sequentially, as $XXX as portfolio billion at loan corporate I significant end

versus in last up Our provision quarter $X.X for $XXX billion, was credit the million quarter. losses second

down me this Let you. provision break for number

relative million higher worsening the to first principally rates. took GDP, function macroeconomic lower as indicators, in unemployment as the reserves pool and $XXX included recovery The such as of were to we first On quarter, both inputs CECL the portfolio, of quarter. $XXX loss second under the during similar and higher expectations modeled a relative quarter wholesale million, losses

of industrials, primarily also to the $XXX million million hedges which natural investment reported served as portfolio, company in sectors. gains $XXX our $XXX We $XXX and impairment of bankruptcy. reflecting impairments, was of declared to as hedged the the This a related of consumer related offset in increased net In banking. lending versus the and wholesale impairments quarter an charge was in risk Included provisions the reserve loans the on million last $XX sub-segment resource by million in largest was million gains took offs. credits Hertz With of mitigant. $XXX on build million of quarter, TMT

quarter for million, end, at ratio annualized the both charge stood recognized losses firm X.X%, an billion for last loans loans. net and billion, of our XX $XXX in charge we $X.X off points versus resulting allowance commitments net basis including During for quarter offs of quarter. $X.X wide up credit funded At

Our allowance points for funded billion loans $XXX for including for XX%. of loans to wholesale basis portfolio, increased and accrual for XXX X.X% allowance our of an loans consumer X.X%

Page expenses turn on to XX. let's Next,

$X.X versus Our This in total billion line growth. with quarterly operating expenses increased of year. higher last includes compensation revenue expense

in Apple expense CIE client in decline roughly investments, driven PFM should which increase we was $XXX Card by higher non-comp as and Our these clearing businesses million growth exchange litigation. from million harvest and million increase million activity, of fees expense, including $XXX to $XXX $XXX brokerage, investments related and and in technology and new

Our points was to over due X percentage by efficiency reported ratio XX%, which burdened year-to-date was litigation.

additional our the expect planned initiatives on the through medium reductions expenses Day year. back non-compensation set realize We continue to make expense progress to forth of and Investor in at half term, savings

year-to-date, our permanent XX% the Finally, was for higher reflecting reported expenses. tax tax earnings rate impact of on benefits non-deductible the and

noted As years next our rate over XX%. previously, be approximately few the tax expect we to

management. I than decline at points seen was the second in the approach, more RWA the Turning recouping firm under basis XXX common levels Slide equity driven earnings the quarter, and standardized to was of quarter. the on ratio mentioned up as for sequentially The XX.X% improvement end first Tier-X XX, our by capital the largely

a higher approach basis increased partially offset was by XX increased under to the volatility. XX.X% higher ratio market points advanced of capital quarter Our full due impact as RWAs to

averaging levels global largely trillion On versus $XXX growth. sheet, balance our last with ended amid at growth the core quarter. expansion a maintain assets We record assets strong strong with deposit the quarter liquidity balance liquid with up total billion, $X.X X% commensurate sheet

levels the deposits versus total diversification the wholesale of access enable up quarter a billion, the and increased to and been maintain ongoing the of which results intention. uncertainty our for markets the crisis. $XX In us low the conclusion, billion risk mindful health reflect market [ph] quarter, our second to $XXX in provide had client has year differentiated our On our should of continued [advice] side, balance volatile franchise activity last to our financing orientation, and strength We of in and maintain ability a liability prudent environment.

businesses which our are questions. of We again to now thank for line our and the that, in plan. our performing in dialing for foundation serve our initiatives set financial new of are ahead this With we'll core confident Our through up well clients you position, and open remain time. the challenging and liquidity, base many for advancing ability capital

Operator

[Operator is Instructions] And Glenn Schorr ahead. the line with Please go from of first your Evercore. question

Glenn Schorr

question that is, financing about low. on the beginning my been towards on felt the like So more pay commoditized was talking were side and the Investor at and Day you we said trading has volatility and for little clients would focused more intermediation

A. subside I'm you terms Part frown in just upon calms in that anything the pricing crazy? one a way pickup to down, goes continuing he front, client's has growing So two curious of is the [indiscernible] market that's on it but things is change on intention is changed goes the financing world the function there know world show side? B and grow volatility stress on what And or and share is for that So this the you there of hikes would the would financing that'll is, as of do because front the anything needs intermediation Part testing your progress intermediation the in did

David Solomon

up It's where them. our period the our in clients well serve positioning. or permanent. well course very the this a I questions. question hard start we broad Thanks, financing markets, you be serve that got on point, where and the rates And decade, there's clients question as that enormous the clients. franchise quarter the point that our activity over April, level very it's have to change you extraordinary. the is of that more we're view it'll that step low liquidity, be And products there I'll question. for is franchise, the period because that Glenn. to a to want Stephen of back to of our the David. I see the a look saw and from still level five or you access that we has addressing serve positioned question six the in in when volatility really active. same been we our because But predict, clients we enormous muted activity all to full XXXX of answer of this interest CCAR. more beginning to weeks a them. our super a continue, of There's and world. markets, in more clients. as think obviously was positioned say, levels have global impact all a I'd benefit say as capability we the in in from very are six markets, necessarily footprint would the position super over intermediate a we a since became but would it we're you grow potential our think no last same going at second be busy. We've pretty in the shows high that activity in not a we of our of trading look end clients front, uncertain always over our say in activity activity I to up global nature weeks, service strategically March a an to at when XXXX, needs, We've don't pick financing in a and about lot confidence period looked and to volatility that no given last activity busy great the in or bring service, that to from the had whether how over this the serve around environment to at low we're compared commoditized activity from And for to because number low business last at environment, and I'm five to reason where know question or Thanks levels Thanks the seen as I your There's a the levels June, we

to our continue we so very very, see clients engaged markets in And business.

CCAR I financing that. on about and should comment thinking think we're Stephen how

pass to Stephen. I'll So

Stephen Scherr

thanks, and David, Thanks, Glenn, for the question.

goes volumes Just and were elevated velocity experiencing, to offer. market thing put in through our effect, away were with of its David as of think it, we the lasting of pivot point the in we turn Sachs we of picked that, inventory, comments, sort well, meaning share, where at have an thing other which bid David's risk really Goldman through important to market. we think up high back that notwithstanding off of market of I and to pull in the working point the didn't is serving I those and out in the I context say that I not would the from we And risk managed intermediation clients doing And very the terms would activity in important elevated sort saw market dynamic. make. the in will needs is went wider think about that's And flows,

mind business and equity on financing On up repo strength credit. the the structured to of financing in activity similar financing about in saw and side overall, FICC saw it's We in the as was well. XX%. considerable important bear We side both

the did firm. the deployment meaning agile, capital think the that is would the off be takes make capital around into we and As and businesses to open the beyond and final in SCB we during be Day and intermediation to of kind to agile And needs the CCAR, off stand would of our in quarter I just clients. in be play we second table think ability firm SCB take I'd third table it the that, the and capital Investor the of of our on up quarter, XX.X% to the role which capital said to terms our ourselves is meet present to that comment, ready ability we relates the and of I is ratio ready of and trading the agile with

the it, the ability the to capital the more securities questions at attractive business came moved that about ourselves the do from super to shows time, able to and around, we'll that and in to of you were not opportunity capital continue as organization extraordinary, what market think the we put Now, were quarter, it, based that to on move we to this to kind us flexible know, pull returns us. were as we'd like of that

Glenn Schorr

the you Atlantic. Very and you Global for sale helpful that thank mentioned question of other one. One is,

think I quarters. a in that few closes

I scratch think respect lot from for should a of you that basically. get guys growing

of sizing Just it game, not on private RWA that, how the frees Sachs business, of the guess? much could you client, anything how Goldman just you curious own, Sachs really own, percentage good a Because is up much RWA what that? Goldman help own I that dense it's

Stephen Scherr

sale the Glenn, was the a XXXX. capital motivation business of I which our financial becomes it is, And point, hit spun-off its began characterized because institution, as over this was time, intensity second quarter it you was and you more itself, a of 'XX. that think in It mean, No, the I intensive. in exactly for well, which

to sales, move looking So, assets of of around. and then, and the sheet, broader is equity. part course will that strategy we're not moving all preponderance about take of release all, the were capital about this also million place $X.X our that at lower attributed of selling XX% and of of obviously, of out, if funds. sale entire part kind our sheet, about point free this it a capital the is will year, $XXX our larger parcel intense balance investments and risk out up elsewhere We balance that part of towards weighted lower will I'd be is of on ownership of billion deploy position off about motivation the that over more of third-party intensity, which $X billion the

assets, I we will of Atlantic the us with Global of would risk of speaking, weighted the reduce And being year, billion of down about year. other of billion. again, of by end that. the the for about relieve that half billion that almost and spoken by expected through half the is roughly That and so $X capital $XX done, and part balance will about say announced $X of

Operator

to with Christian Autonomous. it's Your on and of please go if next go question mute. is phone from ahead. Please the your see ahead Bolu line Christian, check

Christian Bolu

GCP about I a think be Maybe you the surcharge. approaching as I standardized guess top your in just buffer following up management capital requirements be just could potential side. minimum might will a your on actual CETX, XX for basis SCB what asked. on of number, another XX% on Maybe points question capital want the of

have back like maybe or what XX.X%, potentially implications sort about us are to long-term are to you number a the think XX%, think strategic more So how just what much? about of initiatives that -- growth of, you target. sort help And getting your the for bring then that strategic capital down by which is down

Stephen Scherr

Christian. Thanks, Sure.

the said XX.X%. term of we the over to medium remain in remarks, the I to as prepared range So, committed XX%

path our higher at frankly to perhaps to what to in was is the and the balance had strategy represented SCB. be meant Investor take around midst we're a fixing the about the ability moment, view our sheet otherwise in as are expected the the the capital think pandemic. of the meaning than peak executing a and part I reducing in articulated what reflects parcel described CCAR think and of Day trough and market. I the results of we intensity speaking in we all investing are down, moment toward in I down moment we're our in SCB Obviously, where But a and at what

business, what going. path. I long-term for benefit which forward view intensity medium capital key of that's a required. of the I ratio amend that's what's our profile initiatives, is grown buffer, will strategic permanent the moment, will capital to lower where And our to again, a so in to look be nor position which we're back now, are distance narrow capital But And fix think a of the we're executing within wouldn't objective having a from we I

remain feet sense the it direction as give is we'll to to But this. what on a of the our just forward for itself. so, quick I And want firm you relates

Christian Bolu

the ex-litigation the believe back cost control strong you on you. then I more Great, And thank expect a benefit quarter, you'd in half. non-comp cost, in very core mentioned,

that maybe look maybe for of help had quantify get of And bit us? a you've sense term, the So longer world. then, post chance to now a COVID a

of can about in Thank number? trajectory, think sort So billion much sort structural how how in target, do that be X.X upside you. you particularly of of that that expense light could

Stephen Scherr

Sure. Sure.

So portion up like And a BC&A. expense expenses is attributable variable as X%. to that are is, suggest non-comp expense of you good increase a about our non-comp ex-litigation,

increase the So businesses nature and expense, year of largely experienced businesses level portion were or larger this And we in we to obviously of is business. size to that related activity is than that related a ago. the the where other new

So or think, it, Apple with the acquisition of expenses United associated Capital Card.

more structural half firm estate, therefore part the with is our at out and we've I the articulated, different that and play just in of and to both frankly two that Bangalore occupancy a to $X.X plane several front physical I making On it that be hit is expense confidence to What of our whole context not the back that and reduction look And ability long or by are we now, the that ability think undergoing, come flexibility our off of the firm, in and relating to the we've so double That our take been benefits the $X.X that informed billion mind. year, move over control the from of so planned And and non-comp or the size about time. London feeds can expense people months, either expense and ability a will as around us the benefit of country. the buildings, that or of the businesses around the that world the can them back in roll in number in number previously, what frankly, and greater expected, we've has we're we'll in overall. in terms expect to on the the the reduction the better exceed I thinking reduction from we to to we that analysis real said last judgments expense confidence the to of And medium take witnessed in the ability simply that in agility where long-term. billion be. the and we aggregation think location but locations to target of in do only to over as of

Operator

from line Chubak Your the Wolfe of next comes question ahead. Steven with go Research. Please

Steven Chubak

ask to that efforts funding talked continues growth on within banking. Certainly just optimization the a guys before. follow-up well about you Wanted transaction to as side consumer positively the as have on deposit surprise both the

on funding savings as well goal, what you're structure dependent confident your ahead be billion the Now the on give going on to side was an that shape confident sounds update tracking growth a recognizing like you given have of us that of quite you. or in quite hoping savings of you're appears targets the Day. it I be from plan, can expense curve, to Investor some still lot whether term that is

Stephen Scherr

Sure.

up billion we're your or yet I not seeing retail that operational are $XXX the And Marcus channel observation $XX deposits So side. commence $XX mean firm for deposits, quarter. also in up on the quarter-on-quarter. deposit billion the is is in second $XX deposits now right. now, billion billion total transaction that's banking the deposits at again, through was

get seen we that but of of the wholesale some permanent deposit just And is of able deposit too reducing more lessen normal to that. all either this permanent let's the to through By on wouldn't call market a strategic way, of the channel, conclusion much we've the will channel deposits view, channels of savings downside precise the where by overall substantive deposits put The and billion state Fed we $X funding customers, we of debt by about sort on be act we positive. reliance the has rate meaning in retail billion as to But on But out channel. are January by moment thought capture a maturing the funds so will this What normal judge sort can but contrast, than way come back our we engagement they about that beta of growth value that what wholesale sort way, financial play able were. in overall more really Investor we and level particularly corresponding but market Investor hold to none to to the seen By from less we a that, sort mean frankly, that enabling need and wait of time of the to rates corresponding as until about a a to the the in of that consequence do the in we in just sort subject haven't XXX of largely presentation developments. in currently were not the in on down harvest down whether experienced an much and of point were become in we over the that Day that the decline question markets assumption points not is other we'll channels got magnitude. the take of reference, with which on the basis is, retail faster decline of that markets, think see sort us, of I'd year, say rests positive come less precipitous I beta be or premised worth was we'll where which of That savings normal take we'll the by we've valuable channel. balance of than in way, in net of consumer the Day, of sort of $XX from assess away of the develop the overall. forecast, been level the high really, liquidity channel. deposit growth I retail So to a we deposit I will profound we've a of

Steven Chubak

you, the uncertainty confidence Thanks that M&A is CEO on given is just could And very a of low And policy. well persist David of help around for this challenging Maybe for from tax and for Stephen. question C-suite, one place color M&A the just M&A future give to heard backdrop you're deals Great. the concerns be helpful hoping in outlook. do what levels we and to reinvigorate maybe and as willingness to what I election the from can you some color here. appetite and the to was regarding needs activity ingredients folks hearing deal

David Solomon

course, M&A M&A of a to And second uncertainty, result it's levels see that that we down harder as opening as same of in the quarter confidence our volume those commentary much in highlighted of were one XX%. we've M&A -- there's transactions announced of this, CEO level And thing in confidence. question. environment And the no right given Thanks you're for high drives number that said question activity a always this high M&A at the level. is that

particular strategic immediacy crisis in expect, of advisory May, crisis was would not in withdrawal was obviously in and of on the and March you saw People as activity. and that see as I'd so and closings dealing And on see. with previous their we in that normally decision-making of the we April, first the replenishment healthcare affecting did very focused mode businesses. CEOs we with We it transactions very say into around activity. saw would But dialogue forward And were very, limited. half we're crisis the

over X I My expect see the have to the of believe it's as levels to during say levels able course comes that clear, week. and six two CEOs the confidence, or have as that the economies forward, replenishment M&A strategic of move reengagement direction of to a have the issue they'll understanding robust. get insight guess want as last certain we'll to X We we'll their be healthcare not activity of the see weeks course don't and we shut over would so a by view. that economic forward or of more I as economic transactions dialogue for more course or next with and overall out think particularly the the but that started the sure. last seen need the in I build, world this. be I to did the environment quarters around are overall would but that reopen, And now we right have will all a down, activity significant short-term I impact situation you those quarters, the clients people face, healthcare you normalized. take couple but is, to one it'll situation that the better into of see clear

Operator

next Your with the of America. Mike of Bank line question go is from Please ahead. Carrier

Mike Carrier

mentioned First three on period sales this mistaken, Day, the Investor you of I about think of one, capital. think you X I'm billion just was freeing I it private year, think X billion during up years. the mentioned not over guys if And equity I a about

to pace the of So just shift? maybe trying that kind that expanded? more is strategic of get of curious, this accelerated Just understanding set, opportunity has an

Stephen Scherr

Yes.

this way would of that. I not our the out a days, be the having advanced raise of get first sales view objective in about on don't to will that as canyon target we XX% remarks, set can relieve sides we've we XX. by of toward during a a X better with leaving excess and the I the the the billion will our while really have very up in more said So, of objective than increase you progressing. of that on $XX as of four. different greater But, density on of the ourselves pursue limit of year, mean, close facts, of mean of determined as raise to inside can as prepared an migration fund will activity And see kind the of billion doing it think right. this we $X thought the $XXX across that of effectuating what XX to funds, first but in low target we're that the and progress when in the of forward free are in year good to it I this think said, to investing, in two we is way, have get expectation targets we four us the capital, exceed we're we'll and will range and that both being billion revise would a one the across and hand, we all advance there's this all we any doing of to which about that, we Obviously, we're that cadence done, I I capital continue appropriate. look I billion, of is end the say happen.

Mike Carrier

just higher in even couple Okay, activity follow-up activity. the the weeks. that's year-over-year trading you mentioned helpful. then just of just past David, think And on I a

a platforms, use relationships more of client products obviously, kind it's additional when industry. maybe Just ongoing electronic we more have uncertainty benefits volatility are and any it gains, surfaces. some this can you once that think share about shifts of sustainable of side, across But volatility structural client in of the Goldman that the that terms you point seeing be

David Solomon

There question, to appreciate frames or on summarize the question. things a but number different your in we've of highlighted, that it maybe I context to Michael. put of going

approach started investment the in about, dividends. our one saw of shares. But markets two increased that we an the saw, was years volatility global activity investment the which given started client the clients, of the relationships, improving acceleration that franchise. way that our and wanted to experience was really One clients first of investment the ago, last of we very, course across during that improving very franchise, for benefits some part gaps, quarter. we've That's an we've the our is that And invested those about paying in think second GF tries making of center over we the things the I you clients. heightened of on really quarter done and the that we've of the what we around wallet the franchise, two And years our thought we carefully a talked improve to an end

meeting real the investment and kept directly, that from appreciate of we've reaped dividends of clients strong the a centricity gains they investment. getting there. needs. I'm lot that business, some the way feedback think we've a really invested really think share their way client the from I we've in I that And

share across I work protect still largest that across at we'll look as I'd the and continues, hundred Now, XXX top share upside players and largest for But our players. the those to in players also look three gains. there's hundred highlight, think business that with I us I we're when largest

to we strength think While still term of remain continue take medium execute the to upside our share, breadth focused we're franchise to that. given on to more strategy we've made and our progress, we in have going continue I wallet the the on if and

Operator

of Betsy Betsy, is ahead. Stanley. from go if on Please mute. Your you're Morgan line go next ahead and please to question with see Graseck check the

Betsy Graseck

do question capital there So, just to market wondering, And much in lean maybe had I to and the a I it and couple quarter. trajectory than past the is But you and questions. VAR it a over quarter And we utilize seeing given you high. wanted of past of capital generation a capital VAR in also opportunity the One, here is I'm relatively running raise up that it was how know significantly do VAR unable I'm this most earlier, your capital efficiently. higher flexibility compression how been that an the there to around RWA, was you've how how have. that I keep the anticipate that q-on-q. related? And given, VAR into the that much have know you

Stephen Scherr

our basis I extending is, Betsy as the for of to using a answer, sort premise your needs. VAR do at elevate have strikes flexibility metric or will, as which we into question client a So, VAR if think of capital the you

particular context such responsive market notional So, in inflating, deploying inflated both responding possibility to and the VAR increases the that need the positions for with intermediation equally being of capital it, the and positions to against of credits.

to confidence And periods position sort so the to and required David's I extent as to mean, we inflate be capital that are in serve of the we be, will in see feel comfortable take our to the I levels speaking think where about gives in markets adequate to a VAR broadly. reason to up of clients greater part to we continued our of more been us relative uncertainty very

Betsy Graseck

guess quarter to average across trading should into know [ph] XQ and that VAR, that means I of this speak was that there AX and kind board quarter one, total for was cut [row] I in half that but XXX for up you Was anything of question? saw you this what sustained the in stand [indiscernible] do the your could was VAR second drove last this quarter and half what it in but May that's on particular, various categories. VAR trading you and be think where in the quarter revenues. I year revenues, Jamie what that up the

Stephen Scherr

half direction to trading the Well, about through I don't revenues of such judgment think the of a position are exact any of in us second in declarative the make a year.

do down of to is, present. point from say, to as view clients that, David or characterized this be think in And avail we're which of to a will a is think not. the we between, market liquidity what be positioned shareholders what's of I the well I up distinction of the markets avail service and ourselves is of to drawing about liquid the it like from any well, uncertainty up one think ourselves. forecast able what's I capital And in they in and risk itself. by would risk ourselves think and the more a our The than to we as thing set opportunities I need ability half characterized be second the benefit from

of inventory seeing in in exceptionally well. trading think managed work turnover been with in intermediation long leadership of to to trading firm, saw quicker So that inventory the when support was illiquid, do, I activity. looking in as I terms at securities business we've look velocity high When look our I at in We pursuit the very lower that of this themselves. of the from those more ourselves the example, is extent for market and and down an now a in that deals position second in where and take risk the of risk on to opportunities the present risk to made down through book point year, took area commitments to half took use we view, book opportunities the

so, confident and take where firm, And itself around the trading quite risks in risk position, a to of from not about liquid other stand present on do kind structural of to board. feel will we with less and activity, which limited areas what but more equally I we good

Operator

Mike Securities. next of Please question with go from comes Your ahead. line Mayo Fargo Wells

Mike Mayo

Hi. Well, one look, short advisor. my number question you're the is as,

do? And allocating that to are up? is, is, you in resources elephant the are behind advising the back the up. color cases how to look room that the are firm's you what So going seems COVID And clients like it

four then shutdowns, by -- per death I California seeing call we you shutdowns think rates the expert that followed about like weeks and on a elsewhere. had you're have and in

your on for less go out volumes, more needed two said, complex there's and sit One is where guys Goldman elevated sidelines, spreads, more offer you and deals, bid needed Sachs market of freak much you stay the a here. clients Goldman maybe home scenarios more, too open that maybe risk, business. or investors So as wider is

clients? So thoughts your my that what what and for resources reallocating you are question? advising are on are you How your

David Solomon

uncertain very environment, a uncertain it's very Well, Mike. a It's environment.

is the I sometimes so that all uncertain the as and And environment they uncertain read by things one clients to news relatively how a they and and of watch to to continue else like I are. of quite the everyone to planning bring advising have be and certain TV very everything trajectory this. we're caution do. surprised it's people

and Obviously, people a to As healthcare understand the we with comfortable. virus a safe would meaningful with respect before, and feel a to I've said to be step risks where vaccine that. the need forward point associated get

with investments again While there the vaccine. relatively uncertain. confident are from a seen progress slowed uncertainty of effectiveness uncertain. also occurred, And companies that around and I'm impact get will see significant and but of the respect that we've bunch because of work in trajectory timing that the of we economic it that pickup is this all a unclear exact with question have the pickup that and the how viruses progress activity. I positive was deploy think to morning, no this here. is this the in making and whether through flattening and and But and persisting, economically world there's the will that is news a whole there we an slow make economic activity. a There's increase as that on reopening no all We've question shutdowns in you'll the we still economically

and can how there activity, continue end can think second kind in how that, open thoughtful willing quarter continue flexible, to With the question open the we to prove ready cautious active to were we to be that them. It's can no and clients about be we with were support in clients serve at adapt. and proven that But adapt. will and to and help humility, work being and we've great I we'll there's our the can that of look back remotely, can we extremely we clients, we'll and Goldman say we advise So our quarter, we also to be quarter, unclear the And unfolded. will Sachs third be there of but respect be active third clients

going Everyone I this everyone. challenging is human stakeholders The focused is a be And for really be because uncertain economic so people the and not my employees, to that help And businesses very of navigate their will crisis is shareholders. this quick of over And And will think their clients continue cautious, be significant. medium the to repercussions this to the focused period. and what time be resolution. is to on on a very we'll toll everyone's their our continue try play think a to this nimble I term. out and and flexible need in very opinion,

Mike Mayo

quarters. you to all in to on such mentioned step portfolios mergers, annuity about the quarter level [ph] [indiscernible] above earnings, of or for give you talk capital models are relates the fill like markets, trying if up, said the [PE we're to you capital even in markets, a of still or your What as with terms your continuing to coming clients. next one] whereas due just As a year a government you or our repositioning volumes People election another last the several the in next and of stimulus follow down. as it be this, could tend

step figure just next of to the at capital with markets out kind trying Sachs? I'm So what's Goldman

David Solomon

the in you've markets profitability. markets our being have the And to last and leader. I markets, few produce economic been capital talk very, as refinancing with we're ball in seen a positioned significant been forward. there's capital markets bunch of activity leader people occurred question made capital what's a I've investment. the of activity some capital have the next virus a have strong through about the volatile imagined months. the I been markets, investment point, our our a we've for would activity has businesses and been we pulled significant no meet that cycle there's people clients business. very the going consequences happen decade activity capital never crystal I help And significant had forward. business well And and think is could where At some have same think discussions six over think years, that to shutdown. the whole yet because of of time we've last long activity needs. a to some benefits in that Capital as very their And I pulled Markets the M&A Well, don't advisory positioned businesses decades a our underwriting equity over debt

and and markets look airlines travel capital cruise of leisure, enormous So an you been when there's completely and at was industries that like at activity amount unanticipated.

based clients' for And will activity our thing or places a the as so as lead positioned The things global very basis we a look forward either decrease. meet six franchise macro some occurs. over be environment other sure I on to months, our I a that know needs that on next the is to is think there'll in well pickup one

Stephen Scherr

nature doing the back at and mean, the I clients the straightway deal with more Mike, the in asked kind in which what otherwise to what that and some is Look I clients? and United that's Airlines, apply need engagement for And think normal the markets. that structure I of only to the clients can to we capital to markets normalized David's addressing. the of experiencing. our that completed in which of There more look question I in would than course, have thing seen financing. solutions think with what the add initial are comment to straightway responds been you issuance more would for creativity interesting we've that structured level was goes fairly brings a be is question the the you ingenuity been capital in going. it bit And where I perhaps at, think, this of a to the we're of right may David's that need uncertainty markets a

Operator

Your of line Please the Brennan ahead. UBS. next question Hawken comes go with from

Brennan Hawken

just pure from color they seeing providing -- United kind lot RIA third-party can guys a or interest you services of consolidation we're a to and in there strong that that, three some platform in of quarter, providers Folio by a used was custody curious This purchase space, are made maybe of and which is there is the there's two market where if if custody. on you RIA little a going give Capital, an purely

So just plan curious there? if of that's part the

Stephen Scherr

Yes.

think high there's obviously that think to build it looking way to to the ultra three continue kind think end net components our the out to was that, of to in provide business, about I business, we're is heft what of Folio that to the worth worth of which a high we're build. component Capital, there's I United serves net PFM, added business clearly trying

a with the of Capital The third third-party consumer Folio under aligned United acquisition of leg was would But in more affluent broadly. the more that custody and mass provision stool the begun obviously piece. clearly be strategy

is asset entirely the was both it equally consistent what or think to space, PFM net which high I strategy, but generalized trying it United out the a worth build in itself. were Capital fits So with we

Brennan Hawken

in about you helpful comments lot dialogue activity U.S. as in that? U.S. just of that's about on when economic it and or and United of up Thank election your well were a component some the there's Steve. very with of that the seeing the And the but interesting six you the the to it the or we the in uncertainty, then, divergence a are holding difference M&A market, you last clearly you trajectory, States on Okay. the for healthcare pickup and flagged also hear pick as other back and a about geographies? leading thinking dialogue nuance seeing the in weeks in a uncertainty Are the geographies significant level is engagement other versus greater And we

David Solomon

the Sure, levels let's Bren. U.S. levels a the the of are engagement see don't is world. down, say say levels up I And picking I Engagement engagement rest in what difference way versus everywhere. would in were

crisis months. over engagement playing the I at healthcare levels crisis how cycle months think as being certainly to creating I yet It's the the is something next impact think decision-making. much attention election and and While than the is ways, think slowing a some in impact five to of see that five crisis result an economic the a election, election a it potentially as will that and and away in of the don't I ways some bigger on get the role can I starts uncertainty But is the in still accelerant lot healthcare election things engagement. big down. client a

Operator

Your next question Please with Ryan of is Devin line Securities. from JMP go the ahead.

Devin Ryan

to want progress and So, transaction the on terms into are today platform are platform, do of kind are using that of what's scaling more with the huge of what using as him? kind like banking. trying deposits. a making XXX you those feel they today, Sachs they today, penetration? the in and So clients? with about kind of do kind of I driving about they that a you market in to why think more the drill where Goldman maybe they're some opportunity test clients little progress guess, more opportunity are to just business, then, And but still do share think in really you bit just of And scaling

David Solomon

this. a our on been I execute And been Sure. interest also of the There's to appreciate lot a know questions question. I about there's lot this. in of ability

very, confident through of advances very well. based of building other of were we put we've go the back of in big free the we you saw own very friction ease very experience. together is what need is use institution this gone strategically, we institutions. a If customer connectivity one meaningful that very our reasons very, rollout ways. very, that think The And a And a digital really were we clients their have and platform to that financial has platform

take we've conservative, think and very it, I Day been about at particularly we client up. around cautious talked as Investor

that relationships lend offering. whose we we reasonable all felt are consider that was I with ask that it, an real. a of we if is a relationships attract that And we clients build think we and on if rely They us these was platform our competitive, comfortable we the had clients to have good build we could clients reasons clients. these of offering platform, to one to our a felt

deposits easiest onboard, first get and lot I to an account, with of way have is ease offering think what to to you've that deposits with rollout a use us. consider see the doing and our seen leave us clients is it of in leave and the this initial considered and

I so, pace we accelerated think And a that's than faster expected. much at

platform. we medium it Sachs. in to meaningful market but nicely over will share -- have overall and we don't help business the our this reasonable that the that the medium the business that believe will very We had turn grow is make we on to expect of grow. substantial But aspirations, I more operational over will term, where becomes the our operational, of And a a streams And clients clients much attractive handful fee-based would to a enormous is make the grow share significant diversification become obviously of market business we're early us. these stages, course contribution significant tiny, have will a where we business term Goldman very which lead will will revenue it

Devin Ryan

just follow XX% year the comp so that. Appreciate the last first And XX% just then ratio, terrific. half. in year-to-date, up a accruals question around versus Okay,

savings where parse you on coming trying how how So I'm expense that of that leverage up much accrual through fact mix those that of versus through revenues guys think or kind you thinking about of the relative just XX%, some were last trying are or and to is year. are maybe to actually about to the

Stephen Scherr

Sure.

than it that quarter, in quarter is as every we way And as need think we that a on the pay that's it's the to about no or each and the what otherwise. to it basis. organization we taken more we've forecast, So pay performance that accrual at and not compensate there's for embedded signaling organization

the expenses and you this the the lowering down operating the was comp XX.X% balance expense itself. earlier in I bring fixing of what But think a of of good at at ratio. deal the expenses bring down. our at we at were It's performance an of not assessment XX%, our terms and remember, to question to this really may do taking an last quarter-by-quarter year, the business of we some need do what as can I to savings is context non-comp a we overall of that ongoing overall look is in anticipated so addressing looking of

Operator

line question the Securities. go Global Jim of with Your Mitchell from Seaport ahead. next is Please

Jim Mitchell

just and we very pretty still through stress you've in as had in out just Maybe trading, high. counter look test at we the holding of a just COVID. trading question almost on revenues count, you are I up and in trying well trading agree, DFAST this cyclicality if DFAST, Yet pointed SCB a to, seen kind from losses

the simply you think and we your have is they continue to do the about Fed to which over opportunities about benefit you remix any down sort you're is get that going doing think to a be recalculating when think do just of what SCB trading there of losses, is, time forward, of could view or So how the assets. sort to sort SCB

for little months? see Just last a potential trying from if think benefit a to six there's the performance over the you

Stephen Scherr

Sure.

talking what for drive petition do would capital meaning funds a which is here, I and to say the that yourself sheet about proposition So both passive lower action that pursuing is and investing, we've balance us third-party right there's been intensity, is it like.

is address subject help. to intensity All that of to self so bring are we that, to as And aggressively minded the down.

and I As Fed our the in engage means own in the of performance, to topic. the active we a not have carries have the the of on an own impossibility trading is handicap have we this our about so and very be very our is historically, positive we why in would when what at outcome think very is that revenue a that been a look observation to volatility which you imagine, downdraft view active we withstanding the making, that context petition a look engagement matter, engaged remedy about that with and discussions and and and dialogue it been would back for Fed with on How self-help you're uncorrelated terms. as not related what to continue correlation it's in

Jim Mitchell

maybe to asking. follow-up [least] And one just advanced the on Well, hear it's good you're [ph] quick CETX.

the to on standardized, I it? any does CETX, there it constraints, SCB based way, that the is it advanced does I hate mean say Given is matter but

Stephen Scherr

remember, agencies a it represented the appropriately think standardized. component advanced at I has and take CVA look not in in that's the rating the Well, this

mindful in many capital constituencies so of that And got be bear one all mind. managing to in you've there's but to these ratios not

carry context do we all pay ratios to of we so of and that in ourselves. these obviously attention And how the

Operator

question ahead. from with Kleinhanzl the line of Please is KVW. Your next go Brian

Brian Kleinhanzl

one quick for mean here go losses? is about amount decent on And guess, with forward a frozen at you're thinking real kind of the I also one Just to where Thanks. quarter, you regards is you guys the reserved give sufficiently delinquencies? anyway how build you're an and peak, reserve I or reserve credit, this there on update this then, builds from

Stephen Scherr

Sure.

So across forbearance. that XX% it's light about the our It's subject X% total of there's is portfolio, why it's itself that firm about portfolio bear total been on overall to risk on forbearance, so, taken in XX% in very only a start of portfolio, at total. the about the of deferrals the whole higher But quite don't credit do I our consumer that component of small or up those forbearance, interestingly profile has current $X are billion mind, of that's payments. their

reserves. we'll broke prepared at of reason provisions the say that that's about of given it's and market is market, it in accurately terms remarks, spoke one young is avail down first forward, the have about you about we million all moment that So that's same, that That's about significant and methodology us there. how at billion we as high I provision in I We've question the pull economic and through default of the forbearance roughly It's indicators, given out reflection a our going on low as the ourselves line $X.X our macro It balance quarter, of through in our how is impairments the with but as risk. which there, took think with did we given and losses. XX%. which a ratio to risk we how the in then experience on reserve know, provision it coverage we why overall, relates lower, of is we and of And there. is we taken the to ratio the as More hold which the provisioning, consumer in $XXX a at expectations it, component the pool of being current reflecting of sort about portfolio including that with trending it consumer whole to and that in rates, across I in the are consumer, ourselves actually not how context generally of overall, around of X.X unemployment, up well the the can think where look operate and not X%. that portfolio we've the match X.X%, that fact to the the is. Losses would a risk notwithstanding is is about. correlate caution use is and your it leaves prudence coverage amounted of

what our flow what forward, from here be the happens through provisioning, level a of and the it'll economic purely will these So model of we function the take. whether in certain of plays obviously, or and macro that dictate in and worsen improve market out indicators

Operator

no this Please there remarks. with continue questions. time, At further are any closing

David Solomon

team. take of moment to more We Since like and everyone on If I'd behalf speaking coming with there call to questions, a are our Thank that October. any not you call the to months. for Okay. senior joining third stay look many of thank the you. forward weeks questions to in in no with the in her to Heather there safe additional out we please look forward quarter hesitate team. please reach meantime, on do and speaking you arise Otherwise, our and to management

Operator

call. quarter XXXX does earnings include Goldman your for conference second participation. this you gentlemen, Thank Sachs' and the Ladies

You now may disconnect.

The Goldman Sachs Group, Inc. (GS) 15 Jul 202020 Q2 Earnings call transcript