- Earnings call transcript Q3 2022

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Operator

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

Carey Halio

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

Let me to the call pass David.

David Solomon

everybody. morning, for good and us Carey, Thank today. you Thanks, joining

on continues remains Let banks pace few by environment. rates at in words a not Inflation headwinds. operating significant off the a seen economy me decades. saying high. recent quarter. raising Meanwhile, declining. are face interest well the Global of are are start Central growth concern accelerated energy and an the the equity GDP expectations and highs. Geopolitical trends Many these end shocks markets of are towards instability ongoing to

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Consumer We convergence will further and growing integrate our direct-to-consumer activities banking. Management given into Wealth Wealth of the

our February that will these forward three host forward we an report using details will will full our of reviewing same We strategy XXXX will and year XXXX. maintaining Investor fundamental remains Day tell we XX, segments be principal businesses, and the also financial the targets. to you earnings We across strategy the look our on now although our

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the by our Consumer with years we is brand which number partnerships We Card, and have and Apple, Motors, built General These and access proven have have satisfaction unique platform, launched largest already Banking is led GreenSky. ability such to as of by #X Stripe, in a of General Banking our million platform, clients which platforms a Fiserv. reaction been individuals Apple card customer digital Combination to to and than relationships more we U.S. J.D. Apple of with piece Power. Apple a Express the for has in two Through acquired our Transaction as Motors, American consecutive the XXX the in credit ranked

Sachs funds rewards to a to Cash. directly last high account into savings extended high the users their banking also help introduced partnership into Goldman new We seamless in from our Card grow have allows account a Apple linked committed the or This ecosystems. This Apple in we are Banking, through to savings new clients' products. Card recently yield for savings a our from yield adjusted week, embeds the in with Apple our Goldman integration have consumers to a to lives. experience Apple add that Sachs directly of we and relationship, and that Apple account financial partnership account differentiated for Sachs extended developer-centric product Wallet. order decade In delivering and continue a we healthier Goldman to cloud-based are expanding to our allows Transaction end and

arena. feedback are as rate to of encouraged adoption We leverage payments the have now corporate greater we of our by choice partner with client We deposits than active in billion the offering. in globally become approximately the XXX $XX clients, franchise extremely the and

the few in years to revenue Solutions diversify driving priority for Goldman to Platform Our profitability. is Sachs next and while funding continue

segment to February. about in forward look to Day this Investor our will We talking at you more

Let our you and me business. lot investment. We a execution what than move Since Consumer the revenues over XX shaping serve And on $X.X in as in million priorities the in see launching the learned X, additional a some generated since more a XXXX, months. can significant we on made billion and Page forward. customers our last we've is details now this we've We've result. years deposit business, address achieved six as XX

X. Turning to Page

rather Wealth already and rationalize a that have strategy, already scale. we will on million than and Wealth will customers and consumers customers acquisition acquire Workplace focus direct-to-consumer spend to future In through on and to our existing mass to The builds channels to Personal purposeful Workplace like ability alone, access customer we individuals. For have Personal X the seeking reach over change we on us deposit that allow costs.

core Marcus remain broader customers Our efforts. deposit to our

across offering the all We reprioritization. our We billion] believe of all deposits. has will service from deposit and that retail the customers continue this will to of that generated of grow [$XXX level products benefit over

Before want the through results to over I to go for it the I following. turn quarter, highlight to Denis the

strengthen has grow, been last and the to leadership Over this Goldman team four years, Sachs. working hard diversify

can activities we value. which now we and serve strengths. on unlock us X I our on deliver wallet forms shareholder of our strategic about our experience better at our Our you pretax to our scale that to We'll setting an Denis. are targets talk see more the it grow X, maximize -- fees, Investor journey, can Platform February. clients focusing grow Day we're to This execution so our priorities, and will and in profitability. is as key are strategy, our execution new management this important over deliver on focusing to this purposeful financing on evolution with share amplify Page turn and Consistent direction up Solutions and

Denis Coleman

and you, morning. good Thank David,

our on the Page of X Let's results start presentation. with

share return tangible return year-to-date mentioned, quarter common XX.X%. on David On equity delivered for earnings As $X.XX. a and third we we on a of a basis, of generated per the XX.X% of equity

reflecting and equity-related position grade. million, revenues net were we year-to-date rank down to the billion, XX% Turning XX% were we quarter $XXX versus down generated $X.X year. Page #X maintained X. expanded year-to-date and million, investment Despite revenues given Nonetheless, table revenues Equity were segment, issuance advisory across Debt both equity last million, revenues by Financial performance our very a high offerings. Banking lead. a third underwriting underwriting ago. net $XXX limited muted industry-wide $XXX volumes, versus our year volumes in activity. of lower and in league to on quarter record yield performance Investment #X strong continue starting

While this slow activity robust, and underwriting. equity in backlog is quarter, advisory remained our particularly

revenues continue on activity. market largely and deal Our advisory certain in lending strong, Banking out leverage pushing to of the financial offset and $XX in as marks conditions, clients in focused though Corporate headwinds be performance generated financing-related lending. net dialogues by of and are middle on our certain Transaction stability million hedges solid and lending was portfolio timing

Moving client this were as revenues year-on-year, to segment. activity XX% in $X.X net Global Financing in XX% strong. billion revenues Segment the total Markets approximately Page the stable continued growth, remains on engagement to XX. comprising demonstrate and activities quarter, of up

$X.X repo engagement, billion Turning revenues of client lending. of billion, now amid we and activity currencies We XXXX. in mortgage quarter, XX% increase than bank our were volatility. this $X.X commodities XX% of Revenues clients' XX. our remain and driven on by We elevated FICC year-over-year. Page franchises financing, FICC XX% on by in central of growing higher increased quarter levels third generated saw financing the third a needs. up across and opportunities intermediation increased with business net support catalyzed produced focused the rates, strength In FICC across revenues in

FICC Our underwritten conservatively portfolio is well lending collateralized. and

third $X.X lower a balances. Net $X.X generated lower Moving despite in more the prime challenging year-over-year supported near-record intermediation to Equities and were market-making of Equities activity. billion to environment financing activities XX% as we In billion. client we Equities. due revenues quarter financing, client fell revenues revenues

to XX. Moving Page Asset on Management

driven Asset and and from other Management specifically, were billion. generated $X $XXX of net funds. roll-off management portfolio waivers XX% billion, fees fees quarter totaled produced Equity quarter. year-over-year, and on million primarily approximately roughly revenues revenues reflecting market the flat of to NNIP More in last $X.X up equity Management $XXX of third fee investments the our public million revenues money relative our operating revenues over marks of by $XXX roughly saw portfolio, portfolio two and gains Across consumer positions and by investment on by million the of $XXX investments. consolidated net of approximately we million private investments million various sectors. our several TMT These entities. driven generated in approximately gains partially from for revenues. our $XXX event-driven in million $XXX of were revenues offset We

our conditions, we harvesting alternatives limited reduce third sheet balance sheet remain business investments market our and to current in committed more on-balance was density the to quarter, Given third-party to funds. our migrate of strategy but

alternative We fundraising make our continue of $XX quarter. billion commitments to progress targets, on securing this

Consumer VIII, driven billion in $XXX closed private significantly fund, million, XX. net Capital the record Management also Partners $XXX third million. Wealth I'll significantly debt Banking. of in versus Net revenues our year by interest from We XX% above target. ago, at $X.X & to on West Street investment its flagship Page Consumer net We which up billion now higher of lending original turn quarter, equity revenues produced $X.X reflecting net a primarily income were activities was revenues and

For the and despite $X.X was to offset and balances. spreads. reached reflecting market billion lending were deposit balances and market quarter of depreciation net headwinds, and higher nearly lending strong double record a Private up the relatively the $XXX third management the by year-over-year quarter, largely net as revenues deposit third of inflows. improved banking fees sequentially revenues in XX% Banking flat XXXX, card other quarter, net were million $XXX million, of credit higher client due Consumer

billion. the loan XX% Page XX. Page XX, in trillion. the of the quarter balances. year-over-year Combined management XX% quarter firm-wide On AUS quarter and to billion and fees at increased other to rates on rose up $X.X to net third income firm-wide in Moving total to interest firm-wide $X.X the higher ended was quarter $X Total second third relative due

and loan real was growth quarter offset in slightly versus total cards portfolio was loans by second decrease Wealth in end estate credit the Management Our at as $XXX quarter a billion, loans. up

in charge-offs credit remains for provision quarter. resilient portfolio consumer The economic our net our million, reflected portfolio, in particularly primarily $XXX lending Our was losses net in by lending worsening Europe. driven of quality indicators, growth impairments as credit and minimal the by wholesale

light credit macroeconomic our side, credit our monitoring On increase actively portfolio said, seeing in and the using we and charge-offs, signs the performance are an we're with underwriting deterioration of That in the Consumer some of expectations. closely remains softening outlook. though line in our

expenses XX. Let's turn Page to on

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

XX.X%. quarter, expenses Year-over-year expenses are related GreenSky year-to-date driven ratio compensation run benefits litigation by operating expenses the our increases million XX% higher NNIP highly relative Through over compensation third $XXX Our to net were and ongoing and and of remain expenses. We and Quarterly focused acquisitions, was down efficiency. the provisions XXXX. rate non-compensation transaction-based billion. were on integration in to $X.X reserves

in As and expect expense time. reflected actions fully we've over we become actively we discussed, engaged our that previously mitigation are these efforts, results will more in

XX. Slide on capital to Turning

up to and of third $X.X XX representing requirement. a capital shareholders, stock dividends common $X standardized quarter equity X $XXX basis and common buffer of Our the common stock XX.X% our points of Tier the to basis In point current third returned approach, XXX was quarter, the including we the end ratio billion under million. billion at repurchases sequentially

a our XX.X%. January CETX XX will surcharge reminder, to ratio our increase As bringing GSIB in basis by points XXXX, requirement

In conclusion, and XXX buffer client of our requirement. points this quarter the above results will We strength a third target XX to our basis diversification basis to reflect points continue franchise. solid of

the now serve us. forward. of management the unlock priorities, drive risk-sensitive we ahead maintain Successful and organization the we volatility a alignment enthusiasm line further our growing the continue the uncertainty mindful of The value. David's our help orientation share platform as fees, further strategic and wallet will our clients. our and maximizing of execution we'll share of solutions businesses questions. and are up With shareholder will scaling will strengthen firm manage resources prudently opportunities We to of the in I open markets, for that, and

Operator

take [Operator We with ISI. Schorr Evercore will from question our Glenn Instructions] first

Glenn Schorr

only be great like but that, capital was for macro big to markets or private temporary, have appreciate lender as not specifically, you're private equity in to I I credit. but time time great in or your those in well I a hopefully comments. in marks And changed private wondering, raising. be a private markets as feel

$X just if manufacturer fundraising talk $XXX in So distributor, in fees. and gross target a state billion you that union I on wonder could thoughts and if maybe your both your you of management as alternative the could of and then weave billion general into

David Solomon

Sure.

and the targets deliver is very thanks So high, question, And to on in them. we're at those ability place. for our remain focused Glenn. in a the and the our level, look, high And confidence targets targets

in be and it's a of headwinds about. -- then opportunity we've and create back, and of offerings sets something going to there's obviously a very, think that attractive. this the forward very to comes as money the from environment, out look an shifting been lot talked will put valuations, environment big this. reset. constrained And continue say progress We're around fundraising, are have vintage the of fact that we highlight is certainly sense series perspective, probably that months. look when we macro a actually I That's there's opportunity very like And in environment alternative offerings broadly in we of at a We over the would offering the the the that I'd just the coming and course very, XX I to it very, private of have of environment fundraising context constrained, while we make a equity a we highlighted very more of script. next franchise, is broad that fundraising the diverse and environment to more that when work And

strategies powder have other if dry hand, some. you interesting highlighted or have you -- On the you

quite this environment. be will in strategies lending attractive think I

candidly, channel capital of good and, good to these support institutional think capital the out still I there's available strategies. wealth

one So we'll have as good our have the And continue are set of And the we'll understand why serve to a to The a for that these I these meet. breadth candidly, to is where together, are good for Wealth the We've we're taking really reasons know the our this. growing continue to is putting to eye best that we the businesses if and by clients, platforms long-term nicely. Asset businesses. best where we're have also approach we are and and in we performance. believe opportunities clients targets broad growing success offering Management that this opportunities integrating

Denis Coleman

I And an mentioned just alternatives we growth in target. billion We increased commitments the billion billion now brings Glenn, our can from quarter. That new perspective, billion. of shy add in of $XX year-to-date $XXX to sit at $XX $XX $XXX towards billion,

alternatives We sits migrate $XXX now continue into our of at to alternatives AUS. AUS billion that

despite to continue So towards our particularly alternatives. progress environment, goals, we make the in fundraising

Glenn Schorr

RWA. RWA. that, in was FICC that for and it better to just as has overall so Denis, related Is the worse up XX%. moving parts. financing. Maybe question risk-weighted Does at paying money. lots little on that Thanks appreciate quarter? maybe or of curious follow-up on And optimizing making a specific But took then related come approach your intermediation? return share you towards bunch that And a I a assets David. and volatility, It's good bit a great, of

Denis Coleman

you RWA. thank -- thanks question for Glenn, the on

on quarter-over-quarter were a slightly note, you our As basis. RWAs down

FICC opportunity as deployment. and that increases as and RWA represent on franchise happens terms of activities. managing credit footprint reductions capacity tightly. attractive growth about RWA well see financing you'll terms to in And very our RWAs And thoughtful number, an We allocate drive scale we we're way in RWAs. being RWA which the of to market-based efficiencies in focused Within deploy our have been in

the the of one focus that's of FICC in financing line. why so And you ongoing growth the the see reasons

Operator

next take Chubak question our from with We'll Steven Wolfe Research.

Steven Chubak

with start a expenses. question to wanted on So

Recognizing You still strategy. be inflation spoke broader headwinds. efforts of inflationary we're as expense non-comp with should realignment of level of dealing mitigation we part the contemplating? the What's

to You alluded expense mitigate proactive more measures to growth.

the sense deliver growth if non-comp to goal in expense. slow to or reductions Just get is a absolute actually want to

David Solomon

an medium go business. at start of I'll do expense Steven. terms about to and carefully. -- same looking to high details at level, can. that we're make. particularly a term. question, extremely think just affecting leading We're platform, to that that the there I those think it. the are in across focused the is thinking then the to factors making certain for different pressure aspects Denis investments we need At growth you is that's we're trying thinking impact growth, there the point, obviously with though, that about an do I infrastructure, on but are inflationary of we're to degree mitigate in having the expense the definitely that's one how and we will investments But the the any Thanks certain think and are technology environment We in

there that different Denis going headwinds of down break on? kind have I are to the but been be don't components of given that sets in, some inflation we've Now and why natural through the walk focused

Denis Coleman

Sure.

of So the we They overall our non-comp. level expenses year-to-date sequentially, they're across obviously X% up period. and down look operating step to at compared comp X% both back, a take prior we drivers year-to-date, are if

and expenses GreenSky over If of growth the is NNIP and at litigation. half attributable roughly to of you year, run with the change the in together integration look rate course of associated last the that non-compensation with

representing is about half. that So

expenses impact also indicated, overall see within we higher On levels the impact of we see balance, where expenses, do do from the taking transaction-based inflation. as actions the We non-compensation we to David category are of some can. but

to and towards of professional to basis, continue that a balance our the appropriate may in strengthen we are going that earnings we're grow we very, think but And something the to which ratio about our think expenditures as driving deploy as the note our release. very that we You previous non-compensation quarter-over-quarter disciplined the in indicated fees, continue investments on firm. way we well efficiency in striking to reduced

Steven Chubak

for on question maybe equity investment And follow-up great. portfolio. a my just That's the

you just than like expected. heavy worth increased pressure, speak There's some some backdrop, the pretty in flagging? which on TMT I market these better better more in was areas better Given given real outcome have favorable the scrutiny portfolios. equity also estate, revenues came a hoping revenue this quarter, could drove private what the the and and equity some And of idiosyncratic concentration anything of been to come under marks results challenging certainly,

Denis Coleman

Steven. Sure. Thank you,

me that cover detail of bit a in Let you. for

So million line, obviously, of on the $XXX equity number components. there's a

have As we we on mentioned public previously, of portfolio, that positively within private within of $XXX then our portfolio, the portfolio. equity million and third also number And things the private north going that a quarter. for equity contributed you have a are

gains billion private over from through our expenses We the the roughly equity activities, portfolio, Consumer. raising positive were transactions $X.X be those third the have quarter, of in came in event-driven and those operating by our or strategic that offset particularly course gains of TMT markdowns CIEs, capital whether

Operator

We'll from Poonawala Bank of next with take our question Ebrahim America.

Ebrahim Poonawala

a I sense. ton David, The guess prepared realignment maybe just your you about going makes spend. of segment rationalize back, remarks in mentioned

the market does targets plan from the the degree same? are how get to the that? supports backdrop there achieving does give as and pace? those we of the a and give despite us core sense confidence look just the sense forward have a of understanding that the around your spend, just you confidence your faster the think as Just tenants in relative But previous lead strategic Or outside do to we you ROE of at a costs, targets achieving this us about rationalization a high you alignment

David Solomon

Sure.

years, targets the we And just And a realignment targets. we're coming and very continue or our and also we're to the doesn't this. amplify, whether clients. driven those thing I we've we be our firm We've most of want the aligns of been and of continue the think target forward coming be that that the efficiency set. we've in on committed years, the there's course capability. very firm script, client over that's ability said focused set serve I last to further we the running on lead to that. And And so way nothing the important is return the out That focused about KPIs us deliver the can that improvements or and to believe would tracking of very, environment to that that the share by The target the share goals number is to this really made wallet few we over real broadly. on first,

making is a for are direct-to-consumer are that purposeful one customer the platform about we things realignment, with business this our we people that our is shift lower. think And of as business changes spend that business. our forward just our that I'd in wealth wealth aligning Now on highlight meaningfully the direct-to-consumer by and acquisition

we're think, align the core were think our don't wealth our for move And so in the But markets, to as better to we firm. this meet either course, I a will this us overall and on any business businesses, this which And numbers, we businesses, the asset meet at do looking that, of and our that you the and of targets the big having at the We that I it way management. and our are returns banking look that's is highlight at helpful would just targets. small in context why way impact this, doing forward. a or of ability pace business was the is of

And made of big at context I'd of again, these why our in meeting the firm. look performance shift. you just not when the But numbers the our overall so we've are this amplify, purposeful that's targets

Ebrahim Poonawala

-- talked hit, about growth in dislocations. terms too. And of just in market a That's private opportunities lending given organic are follow-up There have of one guess helpful. asset I been lot you values that

where just on execute and you're M&A, of terms focused appetite in us remind Just M&A. to

David Solomon

growth on focused on we be extremely to the front plate that and and we at have Well, continue moment, the us. our businesses of the in our things

in. know, the at acquisitions We're of our focus acquisitions. we process a those where As moment, lies. that's made you of And couple integrating in the

executing remain on we As moment, future, the are the focused of we the have But us. the and Management, on we'll that in Asset things forward integrating there if accelerate we them. go front in opportunities and these very to consider at particularly acquisitions Wealth in growth,

Operator

We'll next Autonomous. Christian Bolu with take from question our

Christian Bolu

point point to that of What you, better of to back the really businesses. understand do when the of other scaling consumer what listen today on Just they reorg the reorg reorg? for mean couldn't the I can trying reorganization guess businesses? the practically What the this they understand I'm to does than broader struggling kind acquisition, before is? the I be of

David Solomon

been things closely, know about you because of talking Christian, us in follow been it's we've -- variety we've interesting this. a I and

beginning highlighted between If the at get you of and working banking a we closely go more activities and we back client year, the to lot markets synergies aligned. our were to the investor those of how update

highlighted the the Management update spoke the in Asset beginning when we year a May, at put Management and closer also big, the synergies the on then And Asset John our spotlight conference big and we in We of thought Wealth together. at Wealth. between Bernstein synergies bringing

client our a So as client we're see been makes GS we it's that years. this firm that it and the how dramatically operating this we've we've One looked not at with it we're And driving set we doing think that respect direction we for organizing doing to at something easier client done that that way, and for number think to this investors in and and of look by how understand against we've and different. by service learned, We've firm the set.

deliver strengthens a And for so clients. as ability progression to natural it we our that view

them on so that's where more to them. Management. have interesting. us contribution And That's this think differentiated and a businesses, a and We them light They're a the over a we're time. is I focus to On we've This committed this allows business, They corporate of to maintain driving we're of transparent and to brighter, Platform in that institutional on And and a way, but think what small the allows we that Wealth our require think alignment the investments. we us serve why one very allows big Asset it opportunity clients. and very profitability to focus. piece meaningful markets Solutions, these platforms organizing banking more bunch us by future shine of in making growing. And direction. with they're moved

Christian Bolu

you. Got

lessons building Consumer. just execute back business? Okay. looking terms full-scale what as the about thesis mean to Goldman was a great over I that guys of thesis, actually out. a terms in as XXXX digital to learned Maybe this It's that switching you far played think trying time, back of bank, in If have in outlined right? on I

seen Square been One really good Chime challenges execution there's and Consumer. for bunch that new like some of job You've could of that. a Goldman a banks building on argue smaller do

leadership You've had changes. multiple

businesses them in and of it we're some of breaking parts Now feels the like different up putting the organization. of sort

you going of just back do bit what to And a business? that how stepping that little is that Consumer? in what have lessons kind So take of here, you -- terms build on execute learned forward

David Solomon

and saying better? the steps Christian, we've platform you're I'd zero what deposit -- think, new learnings. reflective learned, at $XXX customers our platforms When markets how last we proud growth the look the you're XX that of I are been six million innovate and years, over team the very have team I platform. looking deposits that's business, always on say have and do examining the Consumer the what taken you billion the broadly. from build over going Well, be we doing what built can things, new in this today of constantly And whenever to I'm and and of we the to you

card we differentiated. think technology a unique I have very credit that's

partnerships. have of We couple extraordinary a

some we in focused that together, directed when and think to and I needs things, customers a be scale to more of business but the is way. think the ability good that that that learned things I the direct-to-consumer attract all of you at very we've one look have

access we're it with our by so we it business where have Wealth millions focusing aligning people. to And of

And I products so being terrific those to at take opportunity products still with aligned in business, a and interesting digital our Wealth what really, provide see and a clients really services customers Sachs. Goldman and to

for their opportunities think clients. corporate we've capabilities partnerships good serve with also end very, digital allow addition, to ultimately provide to them or and us interesting clients customers serve very I the In that built

there yes, Not have everything been so bumps. And has been perfect.

customers more always forward. we particular, built go in firm that diversified innovating. the meaningful that also create we've happens opportunities think when meaningful ability move and can I base platform we that our us big to a we a Wealth our a as of have well And broad funding you're think, positions for here forward. on and offer deposit platform grow from as services, to ability But think array things an I I

Operator

Betsy We'll take from with Graseck Stanley. question next Morgan our

Betsy Graseck

So two questions.

to this? you to part you're I aren't that conversation with been if on to guess mentioned I morning, ability right. from Consumer going way the generate a you're Apple follow-up the as anymore? through know that? know XXXX, Is just fading Card. renegotiation enhance business as expected. your had on not restructured much David, that be to Because I there being did that a how it's result you this now. balances anything any do it of CNBC got in of as a And there Is that I the is revenues the carried going First, And

David Solomon

it's aspect made kind acquisition and first of that services question, to this Card, customer spend I But a two change platform, no of doing Apple and as services that Apple. think unusual where one no results expected. had this add partnership their our Wealth the to middle their technology we or lower in there's fact very with Betsy, The population with for with balances to highlighted an we that an thing, goes morning on down certain partnership With the of ability with focus we continue grow different offering people. partnership gives is very, the innovative that your very forward were paying don't the on So it respect the big the in results costs than it's of I platform. very, and us people positive because led modeled and strong with a partnerships therefore, amended quickly. but there's aligned were terms that just we statement we something consumers alignment like embedding we and business, the very -- have results credit those lot more lower extended partners are the to that and, have offer. to of balances different was of That one to though, audience there a more these this. Apple's to are technology mean the opportunity, that card I you'd what I of a there's good we for consumers, millions that of of actively if of a can the part we're consumers

And forward platform Apple us both in at looking has the believe so work We Apple. arrangement, the believe for that. to and that.

both this And wellness sure that that access of valuable to really we try move to consumers financial attractive the so to is changes digital are made for and platform. as make we forward deliver continue on and us to

Betsy Graseck

sense goal this year-end? Could give still a a the as I highlighted is And in Jan then quarter such of progress into action for just topic, couple been trip is to the that score the quarters, us don't you've that on to if 'XX. And question separate but looking surcharge. you that on XX bucket how down GSIB bp the the your there on bring you think and you've table next over take GSIB past to

Denis Coleman

that Betsy, question. it's Thanks for Denis.

the we is, at the of focused of We're year. the targeting remain quarter. on X% the message one quarter we gave position second end Our same GSIB, end the closer to

level. to track We achieve are GSIB on X% the

would change, in generally should away As GSIB. we that. or from quarter, could from the on the indicated the with now the focused I remain into we today, we clients market reiterate looking where sit opportunity But right X% pivot we now set year-end, that second

Operator

next Fargo We'll Mike take question Mayo our from Wells with Securities.

Michael Mayo

questions money sense if and On What not harder and you billion Consumer revenues is just I'll the be or for, reason to lose that at say you sorts I'm don't ask XX that along articles, but were earnings know money. requeue. questions a two what it's in $X.X I start-up able were if requeue degree, have X, make And the that's the J that the road. the easy investing I'll I'm Slide for the any last to of now, news not of or there's first for months. sure ask I Consumer? money all case the that makes and lot you'd and if curve down that I you And my

an financial expectations? your is to from how panning standpoint So original standpoint, earnings out a from Consumer relation in

David Solomon

hugely doesn't the at money that. But further So than not giving go at to transparency say, deposits four-wall make I'm Mike, not I will same the what platform the It complete on we've pace we're And moment. to that business. are front-loading look had, what stop as the the Consumer we're valuable. of the scales the will believe the not growth we way, you deliver and you're reserves doing do returns going that firm. accretive so

our I'd overall strengthen ability the the same. something firm and this, strength very highlight and very, that's very accelerate firm's this shifts performance our firm. the tools, And is the to to so we what continue and and reflects continue with We're the overall feel we contributing to remain to activity play that. our everything we've good some about think making but that journey performance we building reported Not of the built. to that confident feel like innovating of the pace -- accurate these targets and

know of okay. on and gets again, of We're going to a so one why things targets, it we set I all firm, those I and And attention, deliver is them. and we've gets lot this to that's make lot attention. But in going think investments this strengthen of we're understand that the a targets.

Michael Mayo

serving investment right, the guess the that's last strength has corporate look, legacy, your strength I XXX relationships, the asked look, five, your mean, for I your been banking. right. -- And question the I All there. XX, years, too, XX, reason

based are so to Solution, two on how based Platform be how Platform And at Whereas seems distribution, the solutions. division, clients Solutions, this the Sachs. on Goldman based first on divisions One when I'm third looking manufacture you address the third you division,

that So little seems a disconnect. like just

Sachs based history you more Goldman bit you'll to trying you're your So just newly distribution, what about a and just and color. doing know I the Investor reconcile with how but announced little elsewhere. on manufacture it I'm clients. at this Day, talk is

David Solomon

it a I Well, the different that, continues I XX account than Sachs in highlight looked Mike. XXXXs. And of very it's look, looked than to a just grow years the and and in The fraction I firm ago change. looked generous years it was you of of but Goldman XXX appreciate as in XXXXs, it very to in was firm what Sachs partner, it the today. Goldman history, XXXXs XXXX, joined is

So we're business. big a

very core the be business Management have the a we're we and I We We're who built core It very When with. earnings accept people over people diversify of Banking in Asset and drives is the that is of Goldman to it our But grow and and is course, that. what we're our here, associated opportunity we changing that with Investment markets financial we our as core as became don't And what It being performance. are. technology. Wealth structure very, have bank. And and in was who came, to fifth some world and to We've together a the doing to evolving business, will powerful I and very deposits back core. engineers think understand businesses. drives crisis, to the and decades we it It Sachs. a XX,XXX the now also to got are. we After needed big number continue active think . as a things today. funding. 'XXs, clear world, regulatory asset started manager world real viewed we we're bringing the interesting we we've needed we very, largest

We've, a clients. is relative what we're we Transaction we to we've opportunities Sachs represents interesting that capability outlined. the think, business done smaller things as of so investing very have where And of our serve in scale some think Platform in Goldman I Banking, handful a Solutions to

terms is very, card in partnership of it's allowing what very this interesting I to us do. think

our continue to into the think as scale opportunity and we And thinking It's worth It's so do we're for Sachs. scope investing what it's than still it. Goldman to And small broaden relative we an it's of we an way X%, the of clients. Sachs but opportunity. about can Goldman kind think less that's

Operator

. Hawken with our take question We'll UBS. Brennan next from

Brennan Hawken

I've Consumer is one got a pivot, I break. and the feel two but like we need on questions

other just So first. let add me one the

last this The tougher six revenue-wise. You how the we be ratio about should been have months -- year? guys efficiency thinking

so the we've of sorry. XX%, And -- -- XX above been medium-term is target medium Non-comp expense a your little sticky.

ratio that out you're the be you guys But that fully do efficiency to -- trying do things you'll target some laid of front? that there. expect year XX% You do you your hitting on think this the

Denis Coleman

Brennan, for I'll take you. question. the for that Thanks

committed earlier, David term. we of one As to firm-wide we're achieve to targets, the is very look them over remain our efficiency medium indicated and going The ratio those. to

pull. that top can We will each But we pulling quartile that we and said, performance. environment levers being This years. not a for target are the been hit necessarily year. every that It's probably not is those of one

we on the will the target. important efficiency can of the in tight, we're to note remain continue our to and with a size you pay a see You'll remaining is we're is the going but respect driving markets also non-compensation line movement to towards our to the our talent with ratio. side, per And non-comp we compensation that for performance basis our make as that sure with benefits then mindful to down a much franchise. our But orientation on that of and that and And make finally, And component making very year-to-date labor to overall our account efficiency XX%. targets. progress remains compensation performance goal our focus, on in that look year-to-date

David Solomon

committed to way. our be never But would absolutely was efficiency Brennan, in exactly amplify, target same every we're be hit meant that It the single just to target. to a year

But deliver so that we a target. operating having and it's to and the remain this been to target has tougher And environment, the impact. obviously on operating are firm an committed

Brennan Hawken

are again, business. important laid to all one, just I honest, think but and for for that to with before And about it to Great. clear next speak you And you're a in -- And were business. Sachs, some back be want down a the It banking those launch just toning and Consumer had apologies come a early complement consumer few Consumer. forward targeting. all Consumer and that general the goals this continuing seems investors we offering, you with Consumer said rollout changing it's on the the you of because to were looking of the heard shift on Previously, to when understand lot current then strategically, while to not to XXXX, pivot very this aspirations is Goldman David excited you're some hitting of around -- laid original you the deposit of business. that aspirations it's building out of the I completely And the like to if not lot aspirations. out go

and So necessarily what say aspirations necessarily be in negative. I pulling the would I try that just to wouldn't the is. understand a back strategically want direction new

David Solomon

that. that that. some that Yes. the it No, choosing of to broader making in we're where Brennan, more were going are go. I way a question back appreciate communicated now probably aspiration on than There's we no got we're And that clear is they

things. Now some have we built

We have checking platform. a

have mass. have focus our be investing consumers the on you good, different to customers, have those big is our make plays capabilities bank. And over very very, platform, And It it people is deposits. wealth versus able have. you our think to with can And And the is of focus shift, with to play for We the those think script. on we I are on directly need that use a strength. to clear customers a technology is and now can wealth the we Gold connect think narrowing now are a them that the -- them to I millions we a and that in is that it But tried We purposeful that to wealth I to sure. and very it's of and we're use of strength platform. the wealth but few independent better aligning learnings platform broad last an years one marketing things, are us if very,

leave Actually, a wealth want an attached here. look other money platform them. platform. to banking wealth a are ability at around if to have wealth We platforms, People you they capabilities

wealth strengthening now a our stuff place where for millions think we some a the channel attach I want to built. of so of very, platform. this have to as And workplace I access wealth to And broad very that people is amplify interesting ability we're we've us

think I investment. a made So we've significant

affects are small overall in us. narrowing businesses think we to I think are haven't still there focus very again, And additive, but We our performing. and want our best for why in the it's Sachs, to results. I is that's certainly excited we're This Goldman focus our of it of that about and overall forward opportunities And shareholders it the And comment the clearly, trying still some scheme are but been drive They I amplify drive appreciate way. other that the it. that decision-making.

Operator

Securities. with take next JMP question We'll our Devin Ryan from

Devin Ryan

financing just markets solid, that's then concerning well. it really starting but Investment some advisory a to I'm Banking. become a are business? you M&A you become on And is just for like are of kind whether just and as recently some recent seen question M&A financing a on obviously weighing ask to friction markets little more whether or deals. want interrelated, bit. and have negative how functioning curious need And that financing crack sounds your on feel maybe transitory still marks just complicated I much of more where like backlogs outlook

David Solomon

level, tightening on say, you when economic I has very, conditions things. Devin, we're tighten Yes. would conditions, impact it economic high these at a very And quickly. an

there's big around minds for impact valuations, I the cost lagged the financing. their People little been of think to in get IPOs, bit. for have capital. debt think the a reset capital I a the do markets

capital. generally no operate forward. environment. raise I the for businesses. think have have that what move close at their reset is to that people time occurring. They capital you because They They stay markets to closed have years History tell don't don't would stay a matter to

the uncertain to adjust for environment. That XXXX. prospects economic said, they in are the growth so And new

there And to think headwinds. are so be going I

or So a more cautious I environment markets we into bumpier as expect M&A XXXX. and capital head a

clarity the of and more from it's the accelerate on the of at economy all stuff that to need inflation we see today. think really operating trajectory I levels the trajectory

Devin Ryan

Yes.

I think, versus is right just Great. bank markets Okay. of peers widening. many here deposits. follow-up Deposit A on delta now, quick The X.XX%. rate in your

gathering couple some what in here accelerating sorting you've rates and And as seen you just over move share expectations so what around the potentially whether higher from been I'm expect curious just can continue to last then industry, kind just Marcus you customer there. cash in especially has as of months, deposit the of from

Denis Coleman

for Sure. Thank you that question.

maybe So firm across the changing across flows given deposit just some observations environment. the

On the and our the consumer outperform equation, continuing side perform of expectations. to

is Our continuing to focus deposits. on attract

We are deliberately positioning ourselves envelope. the competitive within

we and -- burdened that infrastructure. be intend We deposits. do not price We're competitive. cost attract in but with It's a we so digital the offering. And intend obviously not other an a entirely to such remain of to fashion lot can leader, do

such can But our Obviously, of cycle. flexibility And something to to thus continue manner a position will the our grow in change own to that far, it's that pricing the deposits so outperforming we we is entirety the have over attract this firm. some expectations.

On disciplined. more deposits Transaction activity we're is to channels, that, there are is competitive. those through through that are people seeking raise There the Banking, more institutional more that being other hand, observing --

raising relative more channel for do we consumer through the competition see that And so to channel. deposits

Operator

with We'll take our Jefferies. from next Fannon Dan question

Daniel Fannon

to Management. Wealth Wanted about ask

what strong about think, think you how in quarter business a a slowdown in sequentially, maybe just here? and industry be had a talk you. to inflows versus, inflow that of record to for we growth alts Can momentum from a has look quarter I saw the for the You bit about for

Denis Coleman

our growth that, alternative So that lot these to period We're a done And XX% that. reality had total over this both work and our targets. record billion quarter, and and to time, of fee flows $XX in attracting that $X.XX of on add been and other our last of in the performance in way thank almost track for has top billion on previously. overall the billion. $X well acknowledging types has do with of management up Obviously, you year-over-year; fees

very the Some quarter, change quarter, at flows of longer that that alternative our these saw continuing then U.S. strong, times. quarter. over we the lead of have in the on at both in activity our times. traditional third and And the very regard able on we alternatives were more lead shorter to we with the looking we're looking secure the course very Other, to channels, that particular commitments looking drive But the pleased the that which across inflows to at are going was focused forward.

Daniel Fannon

with about realignment, for banking just strong. those the reasons. shorter-term the handful in Consumer the addition to more well And gave businesses -- a The were it. think just both on just accelerated the trajectory even of trying basis. about Got of thinking in of the momentum step-ups quite then quarter-over-quarter But business, and as private consumer as banking quarter-over-quarter, you the lending

a -- be helpful. color some little there would just additional color So

Denis Coleman

obviously, do growth loan Management quarter-over-quarter. billion across mean, Thank opportunities, about good firm But see for particularly overall, the $X Sure. the I segment. you. to we just continue Wealth was

segment. You advice of finding a existing for increasingly, also relationships to set them. an financing high-quality growth place. much solution-oriented and we clients, been It's us. are better way but looking to in for in existing those our We've provide obviously in that And that's we're opportunity lending they're saw leveraging that franchise recognized very for in serving us

financing so possible. we're good floor focused them the as we're those of that we making on to activities. sure supporting types very grow holistically opportunities And see continue to as And on

Operator

O'Connor Deutsche Bank. next Matt our from with take We'll question

Matthew O'Connor

medium, bigger higher a too think likely we over continues looking ago? And structurally income here, higher Even And rates? usually, May just if I wallet level. be But thought that bigger to we higher kind normalization of from inflation, frame due higher of for a guys at of And bring volatility. tried permanently materially things and what settle might to I fixed down the obviously, calling am be. long reset than maybe quarter, it it trading? I not last good are to does keep longer-term kind wondering, you has

David Solomon

the it's the think created wallet. a a think the before to pandemic, I Look, Matt, I go to think always back want I larger But has macroeconomic and period do activity hard shifting predict. to if you level environment client of

the things amplify one think basis points benefited I XXXX. wallet we our we continue over this, of from, to share that by and to try is XXX grown we've since

larger we're and share wallet improved But the larger fact last with been years. benefiting is of has wallet XXX available the the in addition, basis So position. growth, from couple also that's of that for our points

do are I active. clients think So

our broad. focused think clients. our market We're It's extremely just can't franchise. positioned. the deep. positioning that is We very truly It's have is very, the relative Whatever will leading what with bring, global on clients that opportunity well against future I you I strong. opportunity tell that to is, a position our franchise but share our serve

Matthew O'Connor

how you to been has into global also there's capital and much including pullback sounds leaning have peers -- with obviously that it. much it into some is as but is of favorable it it some And share in and how the business you -- you're been investments, been so lean they've building in the to obviously, terms by maybe of of enough financing, mix gains, some

David Solomon

resources fundamental U.S. driven it's are benefit. it's ethos, Global material it's in shift has investment gains they the business. Sachs Well, think people had Goldman impact on it, global firm, committed the our mean the And back think in Markets the affected philosophy share One to to a if think players that the going of allocate, I pulling the our big I our is actually who the But client to capital hard are and big the peers shares. I I that pull are it apart. thing

we clients. improved ago we top a XXX that very materially with. a to few said very XXX years division in top that. of positioning know effort team That's we coherent that very, positioning. set out -- XX. top I executed our client our with the a has It’s over were improve XX were think client X very in XX X I -- relationships, the against now in been know that you strong in focused We're our improved way the we the top with and the had

think on our the biggest I impact that's had shares. market

Operator

Gerard our We'll Cassidy question with from take next RBC.

Gerard Cassidy

you for of the the for funding deposits your one recall talked wholesale And Investor need improvement I costs funds. advantages back deposits. about was in on growing from David, your if the Day,

goal where stand of in think I then And the terms a rates, of at And deposits funds. has on wholesale you and improvement do With business the of that second, with to that? in rise you had funding all? XX-XX lessened getting half

Denis Coleman

It's thank Denis. So you, Gerard.

at Banking some is diversifying multiple channel. comments another. that original the time, we of think funding them. deposit that in We've that of Investor one benefiting as the platform of on since indicated Day, very funding the I outlined focused the period pricing developed, stickiness So mix, digital of is channels. Transaction and from previous are also The and markets

that. goal that mix, of changing terms In have achieved the of original we

to be continue that very, We very focused moving mix. on

quarter-over-quarter improved our a unsecured that basis You'll we other deposits, funding. see have on reduced our

So strategic we've focused of It's overall us. discussing. been that within also remain for the on realignment that. we an attractive funding source fits It

Gerard Cassidy

that? on markets that your of an Is then finishing monetary outlook, straightforward a other on, in and capital to Very tightening David, for the follow-up what's as with rebound we're aside the markets you in Fed of that in quickly of obviously, the Or terms have after a situation? European do seeing. it Ukraine good. in see Russia and the with business, factors its what's course, And going improvement and play all tightening from going

David Solomon

don't I for Gerard. it's sure, simple think

to will the think understand that Fed trajectory we understand and uncertain. sent I get is or very do executing cycle whether to has and, of the where going to we where in to they're going uncertainty better of clear pretty near place get but the I a shift will still trajectory where forward. policy I there's to the therefore, think have think forward. goals inflation tightening point the going very, not a growth it's as inflation economic some The term,

And uncertain think in I period. we're an so

that current But have to caution as of to a a look improve operating have get in for we this we sense ahead not the as think into XXXX. if I economic you a we'll to or prospects be answer as XXXX I we from closely. with Fed's forward. this firm don't whether clear look growth -- and trajectory, watch we'll But we're the warrants, will place where way

I uncertain. still think relatively that's

Operator

question our Jeremy next with BNP Paribas. take from We'll Sigee

Jeremy Sigee

lot please. specific follow-ups, covered ground, of so of just I've a You've got a couple

I think goes and joiners this the back topic prior to The all the mainly new wondered just the because quarter. were impacts acquisition first already one quarter. with in in the seasonal cost headcount increase that's I if

if really is just think the about seasonality that just for how and talking now. cost about wondered quarters you just you've I So focus headcount a it couple driving increase that's to relative been that that of

Denis Coleman

for you that. Sure. Thank

terms a that In year. of based a change, change of is attributable hires to time on of lot quarter campus

velocity. Our mentioned to an intention hiring the new classes third slow professionals quarter. occurs starting We during of

followed We hires hires references have and that through growth of topic initiatives. indeed the market. mean on not to does not the That's making we're in still slowing say that to that strategic velocity down

clients. of Sachs continue our to also our deliver of of Sachs. grow lot talent we outside lot inside the to Goldman a There's can firm. opportunities that Goldman of add a attractive team There's strengthen to talent have We ability for to to

of are overall growth, we So strategic nimble slow also but focused to it, to and hires. strategic headcount remaining respect on looking with levels

Jeremy Sigee

all to separate just a sort about in follow-up I high-profile which make such to Very Workplace a of thing blocks on need be have and new clear. that Wealth building to you to then feel a successful of to a the you're build have there Do -- are talk Management Wealth Or Management, -- And to that? that space? going success for way. a grow you bits is that the it's you

David Solomon

started early building the date It mean going XXXXs. with ago. get I was I in it the but I'm is decades the we actually Ayco. that to started question, something this So appreciate the acquisition Jeremy. wrong, of

Fortune the member the which block then a and addition organization spread companies which executives. think It's which with through just Capital, deal into the we United of do services Fortune partners to than financial and us was And senior XXX I than and we building with allow corporate us think service obviously it was we basically that today, built hundreds years with then we few partnered years would were ago, any XX executives been more the And ago, last the the to made counseling But wealth a under team. in nicely, to management years this. that that broader that footprint more reach building which worth to that digital allowed over we've platform with. of broadly gave the net XXXX. the added to provide XX that investment -- then of I us has approximately grown allowed few to clients us and more that affiliate that's the corporations solutions of we've was more of in business half to high

financial thousands which depositors with hundreds clients that companies wellness partnered to or ultimately certain of of on or have broadly. become we're employees, more we wealth So to come we're offering can our platform where

sure that to it. and it built we're more and we've put now right, pieces that. trying and are And And of firm. execute think grow some other make there in place period in we we've invested that a last the So blocks place. for a across over much to of years, long highlight amplifying started been directly the in the so the time. are aligned we building But They've of couple big opportunity what over with strengthen we've that you're that can it's

Operator

We'll Wells Mayo next question Securities. with Fargo from take Mike our

Michael Mayo

And going I the face resiliency, against, all your you some resiliency But if about is the ricocheted this the which for that that's outside is the of protecting I'm could of long then reported be blow now. declines. big I in U.S. a -- of, that or largest hearing really you that problem third-party volatility you. and banks, peers back debt stock in other how to had you come is I'm to the it's amazing are backlog there's word thing last? guess you talking yourself on likelihood quite How back haven't say, have the correctly. the the market guess, does so remarkable up quarter far. And hit

David Solomon

by firm to trying question, coming. is about the it's risk strong the management good culture just appreciate look, always and around Mike, think what's So management, fact that very, a risk the and has I risk question. and start And focused on a look and mitigation corners very

are things So being questions I've to in cautious. think highlight tried a that I uncertain, today we're of that number

risk difficult inside think I about our think be think let's our as we we've and try operate of more taken a to number allocation, that variety lens as actions a the of we're about firm as for we in places we about prepared environment. think RWA a doing to things

Now financial we're firm. obviously, a we large have exposure because to that

we're well positioned. take to XXX% is we're make no protect yourself from actions that But sure So you there to can't question that. trying

during I that the quarter grew the during we saw capital buffer think you our quarter.

reflective things decision on and bit and we can little reflect spend more of little environment we in across what's the when places lot digging ran of bit markets conservatively. We've thinking going other more that, things about watching a time to been see that's amplified. like think be where in UK And been back conscious a a those cautiously, a in this I

that focused financial big We're extremely just lens. say I like is And through the issues operating we're and uncertain. so think institutions. we're at it's that. world on would I fragile moment, And And the that

have in us, volatility exposure. we're to shareholders. on well very our our a problems, we If there at And to broad we'll well basis, we're I could if bigger we're on But serve throws going be whatever we bigger to and franchise. global -- or this. potentially deep So focused the them. management risk there and to capitalized, that hand, practices continue have zealous make we've and clients very our And on sure other relative got world well think exposure were operate a ourselves the was for

Operator

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

Carey Halio

for us for you everybody, Thanks, today, the and all questions. Yes. joining thank

out hesitate me. If come don't that have to please any you additional up, Thanks questions much. reach so to

Operator

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

now You disconnect. may

The Goldman Sachs Group, Inc. (GS) 18 Oct 222022 Q3 Earnings call transcript