GS - Earnings call transcript Q4 2021 | The Goldman Sachs Group, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. My name is Jamariah, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs Fourth Quarter 2021 Earnings Conference Call. This call is being recorded today, January 18, 2022. Thank you. Ms. your begin may you conference. Halio,

Carey Halio

may reference is is Good www.gs.com. not earnings our the release Officer, duplicated, Relations conference joined Investor Group, Head and which copyrighted Note, will Investor Relations cast material measures Chief our page website on the audio Halio, Goldman morning. Sachs call. be I'm of Sachs. at on Solomon, we Officer, on earnings information This David rebroadcast non-GAAP at appear quarter Welcome of fourth forward-looking presentation, and Inc. Chairman our or Carey Denis This and be reproduced consent. Executive without to found Coleman. Goldman the earnings presentation. our and Financial and our of Today, Chief by can our statement today

Let pass to David. me the now call

David Solomon

Thank our good Goldman pleased and $XX.X Carey, with and earnings Sachs Thank $XX all-time revenues of generated greater the high. billion and record billion, of previous morning, I results delivered us. record than you, all XXXX, net performance. full record in everybody. XX% for year over joining extremely We am you

we While XX%. our by supported results operating the ROE healthy among our annual highest return peer environment, an were with set delivered of

we our dominant client-oriented years, and last that Our generated to return this the have been turned Goldman had our annual up M&A as Markets, record over improve where now In for rank And progress, the In produced of we M&A we over in $X the revenues Investment made capital incredibly from X demonstrate time year. adviser to the set this exceeded of profile. and and active and execution. Sachs top top in revenues a and for to its the strategy Banking clients again previous working. is industry-leading XXX that the markets client-oriented more XX XX an XX business, and out billion. remained extraordinary segment great we XXXX. We've advice with Global year we business have XX% return by record make clients, time

Asset both are asset to top had commitments five-year advancing alternatives business last our strategy platform We're $XXX a In our expand over $XXX Our billion. we have the in manager we third-party our X billion Wealth and record where two globally. Management Management years. goal of against raised alternative years,

are and We goals. focused updating we'll keenly our business, this on long-term growing be

record assets proud the largest of supervision to a trillion. are under globally We run $X.X fifth with also asset active manager

billion we During generated the inflows on and record higher market Management we and position strong the a Despite are and $XXX revenues. fee-related year, across businesses grow to inflows, our drive Asset path in platform. Wealth Management a long-term further net our

banking At year. to our introduced XX quarter businesses; new of franchise launch three continue to be over Finally, look we of consumer I to we the GM and creation week, take of excited million customers the of forward we platform their future, where lives. by card, Last enabling financial Rewards XXXX, My control are operate committed do of our in we later efficiently. businesses; and strengthen and existing and more to addition into this grow later Investor our the the this our GreenSky Day diversify checking early things:

our elevate profile These growth a clients. with ability leadership underpinned we to As diversifying Notwithstanding will a forward eye over as before our return by strengthen firm's keen committed efforts relative focus made and to the business to we our team. to we organization this date, delivering the on these mix. took shown today's results, we've objectives solid by remain on progress are driving relentless our on

that invested in each ahead, firm of we growth to the belief as the look scale of market add billions the initiatives. initiatives grow our time. dollars cap to four over has we tens our have I them potential We to As with great of opportunities these

now our execution our the month. we since of been next Given the of it two Investor has years Day, plan phase address next to details

Denis, by it some me to of operating the to volatility. uncertainty. thoughts I Omicron continues contributed Before provide the question amount environment. be there that I'll saying let There's surge fair no on recent turn cases over market a to in start

have that However, it, wave impact. the an view economic some I'm has by to we vaccines way Omicron Therefore, will is COVID-XX in severe find supported expected a encouraged and that peaked be by will already treatments. of My that new and and with live shows society, is a to is less less it data endemic as countries. of efficacy

to such that of banks likely For want easing More could broadly, there's makes they our period no of before time. are that to the protocols environment, adapt volatility for we Inflation central Reserve surge the firm, state and major office beginning raise which the to be while pressure may late to on to these majority more in Notably, also our countries, of prices rate more our now being reiterate believe will is year be dynamic in the and monetary Federal decrease. our persisting economic policies unwound, in activity. people implement near cases growth, as of the asset with by on recent and this back many an to that pressures some continue start to safely. new impact flexible term, expected inflation world hikes see the recent I also have I rates. of the economists it culture, In of is our dynamic drove a client the in coming Sachs. this my any the this record this XXXX. Based putting the enabling we take in and their critical and four Bank chains. means is my is had easy to intensify express on success policy, to inflationary trend of to us may of tireless are investments benefits supply and We England our even last sense And In dedication above I new the components experience, in in Goldman surprise out our on remains position a that support including success. this at It I for the other in It very and the make move performance In these also approach not all opportunities a we conclusion, and and investing committed variety excitement I in enthusiasm safety. XXXX on environment. into our long to favorable personal to strategy shareholders pay-for-performance investments as our want backdrop outset, year. we but the health no people outperformed. firm, people profound of for XXXX, believe in and importance and to our with for place their by commitment collaboration we demonstrated our mine culture said their our But of remain strategy, a priority ahead, work. And our opportunity term. are supporting mistake, as only we executing XXXX, market ways, through in thanks in people clients delivering we hard invest for to

year the detail. to me turn cover results Let the our Denis over to in and quarter for it financial now more

Denis Coleman

morning. David. you, Good Thank

earnings $XX.X our X on $XX.XX. of $X.X and performance we to with billion, across billion presentation. earnings and share year quarter, for our This the per of In EPS. start revenues our net generated contributed the revenues, fourth results of Let's of earnings record page net

during quarterly last maintained strong starting Turning completed to results volume of trillion billion for table the of almost of revenues M&A share revenues XX We with industrials industry in particular number by as Banking versus in the Banking and Investment position very Financial highest M&A league remains results $X.X segment, performance XX% groups, and all-time X. billion. over shy outstanding of fourth of quarter's delivered Investment the advisory across XX have were on announced in XXXX year. just rising years year, page of driving quarter, a strength XXXX, last its $X.X elevated XX%. in geographies produced one $X.X record. revenues with and healthcare. TMT, In for market activity our past participated we transactions

M&A share we of an coupled We are bolstered forward This further is with also We ranked strength around corporate performance supported outlook underwriting, the billion. capital higher investable started In market year. pace fifth of volumes across levels backlog industries. by our with our more year with In debt activity. financial were $XXX for year than for number the that in $X XXXX, strong record net from deals, than we sponsors. underwriting, across record consecutive well of volume revenues with industry equity confidence, produced despite continued high optimistic accelerated XXX during X transformation by the the $XXX leveraged quarter XX%. with roughly significantly of where asset-backed as million, representing and start of globally with billion finance solid excess revenues revenues volumes We an Banking Investment as is

X. in its Global by best page which relationships driven top billion annual strategy. results consistent Moving our equities, financing higher down rose with deepening an helped XXX Markets to as Segment growth was the billion the Full year-on-year. in net our performance our of clients year revenues, revenues continued as by well with Equities progress $X X% in revenues on quarter, posted X%, were $XX increase since XXXX.

X. Turning to page

a equity an revenues by client decline in as decline in $XXX of billion support has and up than markets. lower a quarter market-making FICC revenues mortgage prime across cash net both increase intermediation. of in year-on-year, largely products Equities clients, global in balances, of financing versus ago divergence lending were XX% revenues a sequentially balances consistent were particularly market-making currencies the versus revenues year-on-year liquidity to intermediation lower business financing billion with amid FICC fourth of in The $XXX strategy in revenues emerging quarter. more led our the for These was as equities significantly amid activity. as lower needs last decreased in results fell and partially XXXX the rates, record solid rose FICC in intermediation significantly policies higher primarily and clients on well of to strong to results declines by opportunities. new down were in market-making Our extend central the as financing were million result credit, derivatives financing $X.X Total of mentioned solid offset quarter. $X.X to meaningfully in franchise. by of bank though million revenues by to in performance on Average fewer driven the activity, fourth driven as offset generated lower absence revenues outsized a opportunities of year the was opportunities

record generated revenues Fourth Asset And $XX.X equity by billion. to money page in quarter for the Management of approximately billion, $X.X investments, on helped particularly the of were waivers of gains million, $XXX first Management burdened Moving revenues year, full which significant X. segment fees $XXX funds. totaled year. quarter the fee half on million our in market other Fourth management by and Asset were

cease. the billion million million to rates of net U.S., to $X.X As of related in by Equity the offset private in we public billion, portfolio of CIEs, and waivers our investments $XXX revenues majority driven portfolio. billion on over produced by rise $X $XX billion roughly gains in our these operating losses expect $XXX gains $X.X investment partially on and revenues

and show we the segment to increase harvested $XX have long-term in beginning we equity in laid with on-balance XXXX, of earnings. X. this actively at to harvesting Since capital reduce progress We plan billion. mark-ups capital which fund our additions sheet billion, positions have ahead facilitation. fee-related page and early strategy billion of dispositions the $X consistent $X this by partially investments, implied Moving out across portfolio associated the private positions our on of been and nearly XXXX Day billion, $XX is with equity public offset since total the which Investor The include of both continued

Additionally, corresponding asset line of of continue have reduction. private we on to to capital incremental $X.X billion $X sales sight of billion

rose Private that our were of prior to fees deposits card impacted of record in revenues increased & quarter record Management, billion, interest Consumer of our produced billion lending up the rate the results record penetration were revenues rose $XXX quarter, $XXX Banking quarter reflecting a versus which of $X.X results UK versus in rates Bank year. and the loan supported increase. of year and Wealth the Management to with and quarter, higher balances helped and billion, XX% year-over-year. inflows. contributed credit other revenues for deposit Moving worth raised Sequential to revenues contributing X% third quarterly $X management by $X.X million of on ahead we X. page to net where XX% expense client full clients. of fourth full higher year-on-year, by In million were by net England Wealth the $X.X year the loan billion ultra-high strong Consumer fourth banking

over David customers versus XX% we loan As roughly up XX%. across by And million mentioned, our XX gross platform, balances are now have up last consumer global almost year.

GreenSky is acquisition We the expect loan a launch and XXXX, strategy. shows growth in forward in XX recent given and Rewards management GM to our of of My component of other and the continue key card. under pending firm-wide assets our fees, which supervision the the growth Page

manager the a fees record fourth and contributing strengthening full inflows As a our David XX% and asset trillion, at year of year, $X.X top $XXX active top fees X and long-term a asset other record management mentioned, $X.X to record other total year-over-year Firm-wide AUS as following $X a billion the for stands position net billion, rose during management billion. of manager alternative quarter globally. to X

interest-earning XX, increase for Total including versus on $X.X segments. the our Importantly, we diversify rate NII we've income last billion all On a firm-wide portfolio of expenses, reflecting over an higher a to lower mix greater been key was and strategy deliver interest business grow shareholders. lending revenues the income ago, quarter, our funding able annual and at fees years. fee more address to a durable year component a fourth net This reliance is three growth X% these deposits our in page for across assets. compounded and

asset-sensitive. As modestly we've noted previously, business is our

expect higher benefit in of net expansion rates along the We continued that XXXX, provide will our assets with a interest-earning results. to

$XXX warehouse year at The was sequentially full in portfolio billion up this in quarter higher balances is $XX loan growth Our conservatively primarily we primarily loan year. billion, Provision book our as growth for typical credit our reflects during where billion Card, end lending lending, value of to $XX structured for management loan consumer $XXX an business. loans. total quarter, increase our in the losses and the Apple and XX% high-quality wealth reflected million expand in

firm. the the grow reflecting financing activities We lending across provision year, and increased expect to next

Turning expenses to page XX. on

Our total quarterly operating billion. expenses were $X.X

ability On we for pay operating year, talent remains of $XX exhibit to our full our to reflecting operating were in labor billion, a philosophy environment. ratio the an committed For expenses competitive XX% below top XX%, driving leverage. roughly well efficiency target, compensation, and and are to rewarding our performance,

Our basis ratio costs. and driven full provision year of by development-related the of of than compensation $X net accelerate to strategic professional of the we as expenses lower Quarterly points the of Nearly XXX rose two-thirds continue across non-compensation XX% higher the market XXXX. franchise firm. fees, evolution spend year-over-year billion invest is technology was increase to

We expenses of quarter. also litigation to the incurred $XXX million during related

Turning to capital on slide XX.

the points million the common equity end quarter XX.X% of sequentially. up common stock at $X.X $XXX basis million was approach, and In a XX total of common including ratio dividends. X billion repurchases of shareholders, standardized we the quarter, $XXX to nearly in stock under fourth Our Tier the returned

by We CETX also impacted in points adopted last noted basis the which SACCR call. our XX on quarter, fourth the as earnings ratio

ahead, we deployment upcoming NNIP on pressures further other acquisition opportunities. the including capital Looking of expect our the position, closing and

levels the quarter or currently expect headwinds, we these in first around in be at to quarter. fourth buybacks the Given the

and and to materially inherent expectations, business reflect our client in relates debt less our solid we based as of to remain results it this year intend a and business amid versus with our current respect though franchise as for As benchmark dynamic will plan we environment. strength issue market the strategic operating funding constructive XXXX, opportunities. upside on well record needs successful our quarter the model execution our fourth In conclusion, XXXX to

with David with an noted, and look around more strategic next we As forward you objectives our providing to month targets. update detail

mix diversify revenues the and results plan open that that, for our confidence now will up durable questions. for the business we'll shareholders. line our Importantly, bolster execution strategic of our With drive more our

Operator

Your will Schorr gentlemen, from to comes moment question roster. now [Operator take compile and the Q&A Instructions] ISI. first Ladies we Evercore from Glenn a

Glenn Schorr

can, as Hello. as I'm to I question Difficulty]. ask [Technical trying a efficiently

basis provision operating know amazing. So, XXX reviews you were points but the that [Technical leverage, Difficulty] of

So, how markets of someday Difficulty] moderate? where [Technical as relative XX%, guess ratio, might level about fits level non-comp much high revenue? this comp you. of And so capital think Thank high around, actually to we is of revenues a two, structure that maybe can people of

Denis Coleman

very you Denis the for question. here. Glenn. Thank Hi, much

able team think I it. ratio over expenses. compensation was is take XXX non-compensation that place compensation go able to plan points, we for the in down ratio of light to to respect to to returns. that level understood the noted, environment you we that a deliver for the I clients well talent we of the a as regarding can in we And thought being competitive of on also continue with XXXX and pull To the ensure environment ready basis performance, the as year, compensation It was execute serve shifts, to is we full firm's and our continue taking continue forward. have and that had still as certainly as aggregate benefits context our in on were variable, also extent by to and compensation while wanted and that that level model to into our our efficiency targets appropriate highly lever to

non-compensation non-compensation I the investments think, we expenses as make expenses out were continue those you firm. in that And up. to pointed up separately were

Other in to But where spend, to activity would then also expense similarly expense. that non-compensation those And expense of different. expect technology prove of would invest. strategic That look largest were the the technology make and we the a engineering area for expect be to our in particular, different drivers number were we the year fees continue and And firm. levers non-compensation of vary spend are we these professional our expenses technology to the Some one a expense environment our spend. operating to that should and expenses extent adjustments XXXX, across largest were different, is we is drivers in That's activity. have be transaction-related to to.

Operator

is from Our Research. Chubak next with question Wolfe Steven

Steven Chubak

year. hoping about seen speak trading I given revenues this industry was opportunities, the think the lean Standardized generated growth also can RWA right been It's relief normalizes? RWAs fair revenues expect you up you've capital. XX% a whether returns and in the Global are call the should But those could activity clearly you if tremendous XX% year-on-year. It's consumed trading activity to into just amount David, to of about to between the contracts, in how we and Markets. as allocated capital speak interplay some we should that

David Solomon

adds. business. have Steve, is important to a I opportunity, might RWAs. able was we In and we But therefore, it, environment, We've if allocation normalized, I client in some Thanks, there adjust. thing to different opportunity capital for we and and it start the think of the an reactive very nimble stuff the and I'll deliver driving the highlighted always one to why nimble to activity and returns Denis this been capital the relatively ability including be it allocated our and a reasons and resources there we we and it's think year that you XX% be feel about were most think good

year, right the everything. in in was businesses, the of Investor that and the certain environment two returns we fact of upside a invest strategic RWAs. year the through the I be through and drive run grow last Day years and team When through that the two opportunity But lens the tailwind an balance client higher and market questions, firm for made and two this have plan in the opportunity we us was over think different, obviously particularly a through first our just where out the highlight, ago, significant we've looking years everything to had value which platforms management we laid lot lot growth. captured anticipated we and our business. lived and the decision could a our none ago changes efficiently. I position book more therefore Listening that of This this environment to would is look our again a it years environment reflected in sheet two of

very think that's see existed environment nimble being that a good the as client to and we've done job permanent way increase continue a because in capturing we, pace. But this opportunity of at activity. no going I the in that

in remain that what to Investor more exactly Day. durable update set Investor Day we to returns. our we be looks we what on out doing at on confident We we focused going of but the deliver to out like, think higher, continue you We're what set very

I can think there's we do. more that

our so in the And our base RWAs XXXX if saw we we that accordingly. of some allocation, in XXXX, activity market dissipated capital expense change obviously, would our and

Operator

next Our Morgan Stanley. with Betsy from comes question Graseck

David Solomon

we you. hear can't Betsy,

Manan Gosalia

the of is Manan a clients, the functionality Gosalia clients, that can for share bit This or What little in announced combination And you bring collaboration a you think you more drive I wondering, it is do wallet your you give on that about with does existing AWS? on will platform? two? Graseck. that with new was Betsy recently talk

David Solomon

there take In more we and and the we data to inside more the connect think sets new with us, they and model, which allowing all to to cloud, continue to we're and come the that find them our data that the our you and to efficiency for with clients This an ability we clients sets connect And can ways to have got There and sets, their which so our certain that they that different share are clients, deploy. can size happen secondarily, very be will clients that our the of value because can we we've that actually wallet AWS directly SecDB old into delivering Sure. In feedback to can real transact. set differently model, that think allows think if platforms deliver give and a service, inside. data One, And can decisions information use Sachs. people for with we about for gives we're allow priorities. with our so to trading to Goldman pay develop the directly data us migrate improve data to from clients. from that execution given can to opportunities our things that. about clients resources certain them; platform those resources direct large and partnership ability us on as feedback them we that

Manan Gosalia

you. Great. And can an ask Thank I if follow-up. unrelated

You you strong you as strong into half And on and any very environment out the activity? the grades versus how the on get and to still to playing there M&A we year had starts the year? said differences expect evolve as strategic you Banking the Fed But see back about advisory in are is have and know positive sponsor Investment the side. M&A. a quarter high of very activity you can pipeline how I outlook talk you across a

David Solomon

comments, I effect going think activity very strategic to of have business. opening be think one And supply disruptions. have these a supply in continue environment And I to a things chain I real, Well, all because on those my is are macro on chain the very, very big disruptions interesting we you having touched high.

M&A further to across one opportunities for a the levels why looking And the are opportunities that's scale. looking consolidate. looking accelerate in our for strategically People for platform are are for changing so, further reasons activity environment. to And We're quite active. of opportunities people

a And backlog look interestingly is there's And perspective and strengthen just position. it's because people in can so broadly, at a CEOs helping they around the continued actually to their getting activity the uncertainty tailwind environment both real-time hard forcing and that for think good ways we M&A from tailwind activity. with competitive

that's around have significant so think way going I out on of businesses positioned. coming And the reset COVID big going to of are amount supply a And activity. chains, think client create a we I

environments, different looks you latter far at get reasonably of activity year, economic that the about Now, the when to the into you it's part good. the back M&A hard very tailwind moment, out. talk see But

Operator

question with Fargo next Wells Mike comes Your from Securities. Mayo

Mike Mayo

get said the event? Just brokerage a special or month, be of an we'll that form a clarification, Sachs one-off a Will next in you firm update. Goldman conference

Carey Halio

weeks put in couple out press the we'll release of the with Mike. Mike, next a details,

Mike Mayo

Okay. guess, higher bit conceptually, level the ratio than the and question fourth improved think from reinvesting to quarter, taking expected. of in quite in it questions. I efficiency benefits Then business? you first to backed Certainly, about my revenues and of more a the XX% the But your do XX% is, the how year-over-year. up

to it's technology, a for the willing much to And leverage. sense list positive you're so, trying that how whether showing get employees, operating of invest complete at expense

David Solomon

And our in appreciate to we're we to a want in we're Mike, deliver more what question. those said know based the ability And out I Well, on clearly any on how the take months confident going forward. we But, this I efficiency information think provide that ratio target. back. committed coming in And laid to you I just environment. targets. remarks, plan we set as We we're my going of and and again, to some targets, to we are very

really to to And given pull that grow certainly fact that returns. deliver year. make there very good In book an investments was on of can environment us we make different different look, continue a deliver that our and set and value are continue the levers for was around interesting I And extraordinary there a more and client this our we a number environment, so about the different very, to that of really feel capture durable it activity, to the I'm growth targets that returns in and activity confident shareholders. extraordinary more firm enormous some very opportunity for

of And so, vision we're our X, focused drive the We're and we wrapped version, forward. the on to not on firm that. up in X how a continue quarter. focused can X-year We're

And so year, thinking that's extraordinary we and this focused hope that's feel we're it. there But helpful. we we're what And like an I on. captured the was opportunity That's way about it.

Mike Mayo

better relevant because stay a seat should to allocating a much resources. And this versus then you're how the tougher forecast question And pre-pandemic? markets you're is in longer question but elevated capital this,

backlog the record the around said but the volatility, start that's more you You of level concern is think really maybe the I is last year, get close at to good. businesses. markets And if the

hand, other money us. the rates, do about behind Sachs Just of as to But moving how higher the outs the the an do Goldman with ins maybe lot intermediary? in days you it as are a On get you relates acts levels? and think and capital best markets

David Solomon

Mike. have ball, a look, crystal Sure. don't And I

and certainly levels, to capture as the and And firm. capture different, share. able of be We've year, clients. environment, right franchise. grown were And activity position deliver We've we again continue unusual we the wallet about and back but but the overall talked We client a our grow client said year. market our predict year, was to wallet normalized thing we be in franchise. to year and we that. a to as reasonable about be our back our I materially volatility opportunity what the but scalability this Markets, we're I'm given Day Investor resources last we is of levels of puts be think I a against wanted so still be returns leader wanted there increase second more to In have wanted our our around when into not think harken materially could this the got volatility share. we that and do of and levels, position, to to that important think We Global increased in a our so, are pandemic. I to package and step there more continue start in and activity next lot we year our the more reasonable our to going important to a to like activity might returns in that to things to think look environment, what half forward you've going macro very, or very definitely

You've changes chain. in big got supply

There's lot going interest You've in rates. got changes a on.

two We're last increased I is franchise. see executing clients. plan. we so, our share. about we've active. It's relatively with feel best on years, been better And what our in still position wallet our strengthened being our the It clients over But

also an in efficiency And business. from lot we've and so, perspective -- done a that

feel on move and Day continue out plan I that expect well about here. in since laid I how has very so, XXXX, business perform we'll And our as to from we good Investor we progressed forward

Operator

next Your question from JPMorgan. comes Abouhossein Kian with

Kian Abouhossein

taking I first I it's question If confirm ratio. compare XX% simple a up minus take year-on-year. it's XX%, of flat And And staff far, what comp that nine or the I been reported that? to comp just actually coming increase if just comp, provisions at comp to actually Can increase, back on The XX% the I ratio, get around in year-on-year. or if less. you're has to so context you calculation just looking of months peers ex is

side. to the on and So your pay more see to expect in comp to global see of the peers what to just trying going understand we what terms driver Street from than we're

David Solomon

of couple A Kian. you, comments Thank I would Okay. make.

without account taking You ratio you're year-over-year. flat that's XX% of And roughly correct, at provisions. the the referenced

revenues more of However, we the compensation paying out year. than also net on real. in than are And of XXX basis last is These provisions our the was we XX% basis And that's provisions. basis history. ratio. compensation comp which our points lowest lower it at ratio look the set It's on

down, drive clients. of on continue efficiency So, drive we that our behalf to

You something up made changes headcount. by I of some mean you perspective. a reference to I would way in just offer

on we Hong London, heads X,XXX that XX% heads heads the like a If those Kong. York, firm. New incremental locations XX% in year-over-year locations you of Only on strategic look located those in hub of of at approximately the headcount were basis, roughly have

talent of world, very very different of expense places. going growing varies grow lot And around the location. as as continue with appreciate, terms in of headcount to much sourcing complexion we redundancies obviously, there's of the firm. deliberately things strategic on can evolve we're and by as a efficiency sort headcount and the our base you associated in and employee So, the priority of a And matter

So, numbers. with that may help you your

Operator

Hawken Brennan with question comes next UBS. Your from

Brennan Hawken

rate here lending Just rate those Can year? we the how lines new lines? would should and the we some some different corporate about see Wealth Consumer you -- sensitivity around the curious give the of about increases businesses, any parameters of likely in & in the magnitude to think calibrate we're line. coming the segment How us in kind specifically given

Denis Coleman

you, recognize Denis. we business asset-sensitive. environment, our than ourselves of look, for But expectation remaining that some different peers. as bank obviously, the see And modestly Thank Sure. a Brennan. given It's have we large commercial being rate said, our

earning continuing our increase to net assets. on interest lending, focused drive are We

expect roll we say, the mentioned point script first million. in should funds. that that our market for number the of first hike, XX a able -- I So, in would our majority context. expect just be you, with I the the context, thing in XXXX I other would or rate we waivers, to money $XXX to total off out benefit in that environment, And to the mean, fee that would was with basis-point we

Brennan Hawken

in could Thanks more. appreciate I one just Denis. for Also, that, I it. sneak if

You items were noisy quarter. guys our is fourth still clearly, out in building now, non-comp. But, based think seems gave when solid. outlook some great you XXXX see what color the environment the about there And on into like the around we it can some

out make XXXX, which talked point whatnot, think and little we down further a and about -- sequentially, understandable. XQ charge? backlogs right jumping-off adjustments? though the that is we even Is good should backing or charitable we they're is the the about litigation Should contribution as You've the

David Solomon

the see and forward across across taking billion portfolio takes think cetera, engineering year sit area and for think to There But totality of we'll and you up the environment. return and to from focus we so and non-compensation puts billion, to right And where $X.X expenses taking $X between the That our was us an past our the certainly as on in efficiency targets, it all in ratio, of invest that's that the a on for number balance be adjustments continue us should again, within Look, portfolio, our as all should make and invest the now. are based et expect number market this continue the us, of technology within and in. item that expense we expense. materially about you I we one framework see don't us expenses. of is today, is operating consistent will to they where of for

Operator

Your question is next from Devin Ryan Securities. with JMP

Devin Ryan

M&A improve guess, the strategic I position. first I of loud and kind on just comments your here backdrop. to just around question clear their companies looking David, heard

firm about, strategy, the active the has Sachs' reasonably a And fintech seeing Goldman guess, of reset particularly space. I been are couple past of a think bit so, M&A in when And over your here. we years we little in valuations,

reasonable price pricing isn't I with more the that But are that So, consideration build? any there attractive through get organic that into more to sense makes here. first or areas maybe know M&A valuations versus

David Solomon

Yes.

my So, And be Devin, here it. consistent. relatively appreciate is to I message going

and or if firm We diversify drive of asset more particular, where the make there ultimately higher have and platform, growth businesses that diversified banking durable, grow these add real digital and see expand more was accelerate those Management some opportunity In extremely the up you year, to we'll And really transformative think in businesses, would and franchise, the that management, the Goldman accelerate of context, mix position discipline. NN made high. through distribution The saw those we we them. Europe, strengthen in certainly consider to which always think plan in doing we with consumer opportunities or had to additional that. But never earnings on them lens and about to we very areas through open consider are management real Asset smart a returns. be Sachs we move channels. in wealth to significant But firm, we this something opportunity opportunity that business an our

that So, the to more to to we were to ways there We the think build What -- diversification looking acquire of of were GreenSky merchant of take price, we're growth we appropriate? very lens gets long it fintech us the interesting to about thought network. get we firm the attractive growthy that's it network. When and at. thinking merchant I are a build some was very you network, us would that and Are about complicated. at going very network a and was how the attractive was accelerate merchant some thought the to time, a what allowed merchant this stuff, a

to was so, appropriate And that we way an strategy. decided that accelerate that

continue to out laid Investor that to that ways we And so, strategy the that's about we're can that execute think the lens as we going we look Day. through on in

Operator

America. Your next from with Bank question of Poonawala is Ebrahim

Ebrahim Poonawala

consumer one around just the guess I David, question, strategy.

I consumer happy question. you've as opportunistic, earnings. strategy is like So, the One, to you I feel you investors, the be it of the made, when being progress getting guess, business the about do the the needs or the diversify those like up. and think rethink, you with that come doesn't are first you But, to things part would credit relating mentioned stock the talk or as we guess,

David Solomon

these term we very progress a the building So, the We're this we're business happy on for to return long very we're take making But set move I've with for and targets a is hugely knowing this investments going is the this very, return time, to return repeatedly, but building meet firm. lens And like of think progress that targets question, we for could the that committed good. big we're some part with the something feel targets said our is be we we're and our it we're first making. that the out forward. business, and again, the

XX the offering. said we product We're already expanding the we've grown call customers. to million As on today,

it, the about we're what us to doing, doing strategy we I very continue right doing we're we're we're I -- we're don't lot clear get don't it. we for it. our term, expect short and how the what but Sachs on term progress and get very, very and -- to for In think broaden good feel doing the thing lot of plans to we're very, the Goldman the have very to credit feel for of that and franchise, good making. for broad a about a long We

Ebrahim Poonawala

do credit on like to on close about quality is two, talk Just worry it? health Denis, risk the probably how peak credit, in one credit are we the do three just you of growth about of lot guess apologize this terms think repeated. the as making I outlook years that if the just given cycle more about terms you a talked And of loan you But out, of in consumer? the about Noted. and you follow-up, taking

Denis Coleman

risk revenues, stability financing remain and durable thank an So, all focused on recurring you to more that our strategic has focused stripes. lending And that very disciplined grow attractiveness credit is very more credit. for and the on but risk of question. We're you risk. the drive all firm, the the predictability while provided on David to activities, across objectives management We're highlighted there

LTVs. we And extension into about consumer the so, something so growth other credit in that with the area of within the about would of structures across doing segments businesses wholesale I we're take grow secured business, account that for firm, is the as within out, point financing, we think our think of example, where business. as the of we that at FICC reasonable we various And

into management deploy the loans. are these wealth we high-quality wealth As segment,

of of characteristics XX,XXX things one the the value the GreenSky high of is the just as so beyond in -- consumer David customer the FICO base. the and for referenced merchants And sector,

but to And types so, credit-sensitive do segment, a segment of fashion. we're making to our balances, an so by effort grow grow these in revenues,

Operator

Jefferies. is with next question Fannon from Your Dan

Dan Fannon

to could backdrop point. part more the given And kind market uncertain share than the you how also, little about the you're Markets constructive given gains from of this more follow your quarter sequential thinking business on if up more in wanted -- market I Global to levels then the at here decline fourth bit equities clarify the and seems are a trading results. be

David Solomon

I'll But we've very over couple will focused something Denis So, again, and And Global back. I'll that's equities. Markets comment a been client on built been our very, make years. the broadly quarter you fourth take as business of We've start on last franchise.

we've As a point meaningful in our way. materially position very, Dan, you very moved many clients, out, appropriately with

business. more at looking share still perspective, But market we'll forward, And wallet the take upside a us base. opportunity as from that client for from we at broad of presents. there's the look think share it sustainable that's and the I going nature what

a from in franchise, we've position our that have upside very, exists also think strength, and long stronger our clients both business, but period the a efficiencies of of the we we're capturing in good that it now terms of time the client we over we that shown and adapting that relationships I with of at the do very business. nature have in

is environment focus going business be And continue will what this that we're continue forward is that, on put and so, to But we'll to to as my move see we forward. guess you a the probably the business last when general business over the around very narrative the go large more it and and course at a consistent years. of back business look than XX

Denis Coleman

quarter. on And just add fourth context to Sure. some the maybe

the third And quarter the quarter So market ever. the of and quarter attractive deliver opportunities equities for capital stepping both a But to fourth that such 'XX, versus of also the same the was when we stronger. at the as really in the was third basis, best versus frankly looked quarter is fourth quarter-over-quarter fourth at quarter again, prior we in quarter less the comparison some deploy the second and in on us third looking of quarter, we did didn't its of saw 'XX. XXXX, performance have fourth 'XX periods exact performance making and versus back, still

very and franchise, making business the of of to of feels the of we've us. the growing client dialogue, and that state the the quality the good focus all investments that, that our on been from efficiencies So financing component the

David Solomon

year business the that to other could last I year-over-year. it believed the last nobody just on Yes. our obviously and in X% the the quarter, but we and only And and activity focus that's thing wants started given markets put business when last that, year, know on highlight, -- set. up appropriate, from to the market's year's perspective, was year, Dan, the just I'd also up And be level everybody

it's that the last on it's out some structural bites level gone that the do going quarter have at in in step there's the especially all what's we've in that to two participants about not and I bigger So, think out that level things the opportunity of improved going to I for of think have saying in time, been sometimes got on years. the But business. think I'm business.

Operator

Bank. next from Your Matt is O'Connor with question Deutsche

Matt O’Connor

I There's and firms obviously reports catch catch-up other up cost on quarter, double-checking number were of Goldman year it of been a just and last of year? But been my restraint this that a year. a to model. lot showed looking bit. from was this media of a lot focus And some just last is Sachs There's

I year, only X%. were up over revenues up comp last your was XX% and think

we So, equation appreciate? is that better should that the just part of here

David Solomon

CEO obviously savings but XX,XXX what fiscal base any and cetera, where environment, and our there's when mean, what the levels. you I I'd XX,XXX places that. kind that coming people the with Sachs, everywhere you model. is majority of were of of say most with think the corporate went to evolving et did -- real monetary environment compensation I was a Goldman component I policy base -- a out hindsight supply of -- the and world, -- look after that fall in there at I component than we definitely there there where around CEOs we year inflation evident at think a pressure run last those and component was to of constantly wage if talk people most traditional vast there is compensation different and on employee what is more definitely I'd do, a the wouldn't call I changes, call through of COVID real economy, everywhere. And rates, wage there's they the And you bases think into still compensation the where process,

year, quarter-to-quarter component are quarter, looking especially in for -- looking they're it, try And the that's fourth XX% I this three quarters, it, seen for up moved approximately more like hold sure. modeling, for compensation were estimating numbers at we I -- at There's that then through basis we in a fourth were put then XX% were last think, don't people XX% levels a XX% through we made when also got that really year, the in be better quarters, at through the aggressively and fourth example, have obviously people exactly, when quarters. it's at people have do quarter been quarter If comp year, where our XX% comp we was would everyone we to to the wound we needed me to on And at quarter of year. through If which differently. and to we to us, and X%, be. had three so, year, been this are to year, were fourth we last doing ratio think comp three going last told the the their going and the the would the in ratio

strategy appropriate our deliver to of the trying time. of returns the is for right given I that think the addressing think that think think a about kind do reset But good all question thinking the was is right, I we're everywhere. We're again, there Matt, I over what's environment through of I So, lens year. environment And sort care that a we've the in done a to of that job and component affecting business of year macro year. the this any taking

so, forward. base part our of going that's And

Operator

Cassidy is next Gerard Your with question RBC. from

Gerard Cassidy

can it out a Thank XX your be with Is top the it better us from being was I we you. driver? pointed what these up, the opening reasons position the is Two-part David, that in real drove out question, you And from strength Is your year top earlier? maybe you with down success? where as X your on and XXX a will execution? XX you up up sheet, from pointed markets not about balance you to to market elaborate of using XX share coming clients. disruptive moving mean, have one, in better second, remarks coming relationships? this or where

David Solomon

Yes.

strategy question, Gerard. way evolve on to the have focused over the there could business firm. for fashion know that targeting is Banking this we we really to Investment Global Goldman in we out XX And like thought wanted our Markets of two been that particularly relationships. from weren't I the of very position. sound didn't stuff. this time to and We it lot a enough back learned And over move the from very And now, client-centric, goes basic about laid couple have organization, our right XX, we years So, improve some an One XX clear And metricing. we think ago weren't a and apply We have XX a always of the lot been feel franchise the extremely there's Sachs a last the to our those years and markets things or organization to execution again, of it's going strategy. business, were The that that I metricing parts as quality like in appropriately. while the comes the of thanks we

the performance clients very that's a in feedback and share. our feedback metrics interacting are wallet from this and with change very, base. against We on our strong them, way they The our that see we're taking at actively looking is client benefiting

there's still in upside think I that. some

you're base them, of them from number be for X, numberX. to numberX if you go XX, Moving or with well, the can we XX you higher. XX some you're -- can not of your -- than number of X, top think and now top be still And more X

get to top than to but can X XXX, going it not be You're higher all with we XX. be think

client-centric in If do experience feel more they on if that still a at improves activity we very will we it upside their everything more continue So, To interest do think a some part your the with any us, benefit every with there's we're think execute strategy. question, if in we a interaction have I taking heart our that. long-term have clients do, in and good we like franchise, sustainable them. we and from environment, of latter to

that investment, more benefit to I work continue think so, And we'll sure. but for from do to

Operator

from Your next question with is Seaport Global. Mitchell Jim

Jim Mitchell

and of you returns we better, earnings strategic Maybe term, or get you impact NNIP question having and projects? And the are about these feeling in deals closer Thanks. closing GreenSky, noticeable intermediate worse acquisitions are any synergies? see do a on to on these as the longer-term the the

David Solomon

feel just decided I good them the question, appreciate as as Jim. we mean, feel about absolutely them. I when we do today to we

these I we expense start and some have to earlier, very do sync And these there's integration. bolster and teams through this, and things that we and that franchises. places, deals, P&L, close said, just upside that about obviously about strengthen we talk these which planning going feel I report in very come the whenever and expected. the as for is medium longer longer is expected with integration the contribution work are to targets. In some for in I we're can as our return But pressure we think accelerate on both these short what That you the prepare acquisitions. term well term come we something as will good said make, term, we're like doing accounting to integration what you to to medium deals and what

Operator

Your Sigee is Paribas with next from BNP question Jeremy Exane.

Jeremy Sigee

a XQ move how capital that sort headwinds main reality, just take I Is items the and you you or that are buybacks? higher longer? You would expect pace for are? what to back talked it ones if big the to Will ratio. big how wondered And to that, share major of about up us scope how are, too of is to linked the they -- soon a soon? could what

Denis Coleman

think would we things ratio. about as So, I to mention a you of couple capital

not actually was terms I year focused is closed acquisition at but at So ending what in discernible XX.X%, headwind obviously, a of of -- NNIP. ending on the particular the yet announced in

to as that around that I part expect beginning quarter. of quarter, the the second expectation the points fourth to ratio And we'd take the in of close And We XX first be for of opportunities. ensure up reason volatility, that level the sizing make at given available it having sort lots mentioned for buybacks, have the Banking a share quarter, that transition, outlook to to the for that of we that. markets basis relates significantly the that, to year-over-year. up activity. of and Investment strategic would do our or And want to ongoing capacity is the we where have support the rate we clients' client our to And see stock referenced is backlog path normalization, objectives. We energy we're single towards our sure support address

for context helpful that's hopefully, So you.

Operator

Your Wolfe next follow-up Steven Research. with a is Chubak question from

Steven Chubak

it's transaction just to And on Thanks deposit that airplay admittedly Hi. follow-up. on contribution ignore banking contributing much the the I and tough business. could speak or is but I firm-wide accommodating one from business for the in XX% of certainly, operational recent attracting to success the year-on-year. the specifically the you call, today was deposits hoping this the quarter these It's wanted revenue got to in not to ask from momentum. most you're business having, this that clients. growth

Denis Coleman

seeing Denis. that David from Thank of mean, obviously, and market banking, X one for very you that. where question. opportunity it's I addressable that initiatives an that X perspective I'll good very large and momentum. we're is Steve, transaction highlighted an very, take the Okay.

our clients board focused well validated by been coming the interface. we platform, on the on obviously user That's now tech, the on So, on platform.

that. very, deposit about over of and ahead as this you feeling growth, clients We excess time. The in target, of in at very have point $XX XXX noted, billion active good

On call, up mentioned a we over ticked operational deposits the and XX%. percentage now quarter's as insured XX%. last that over deposits up core had ticked of That's

time hold and to in we've the ourselves to businesses, front, accountable progress David metrics management I we strategic provide which and and as we also again, made grow benchmarks, to So guess, way make revenue these we're trying build of and very terms over time. which on indicated, progress. these look in targets the good

north revenues So year. of are and XXXX XX% $XXX approximately for than now more the up for million

we on a in very, the competency aspects to and we business light each date progress with forward. build that feel and market across of see about our that of that attractive the So, corporates, core and is good the the addressable what of leverages very

Operator

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

Carey Halio

Great.

we'd Relations for thank speaking you we like since me arise, don't there So, do out please to no additional reach healthy, or call. more please the stay others the and hesitate to with Investor just soon. And are forward joining to team. questions And otherwise, questions, look everyone if on to

Operator

Ladies Call. you and your gentlemen, Sachs Goldman XXXX the participation. Earnings concludes Conference Fourth Quarter Thank for this

may now disconnect. You

The Goldman Sachs Group, Inc. (GS) 18 Jan 222021 Q4 Earnings call transcript