GS - Earnings call 3 2023 | The Goldman Sachs Group, Inc.

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Operator

Good morning. My name is Karen, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs Third Quarter 2023 Earnings Conference Call. On behalf of Goldman Sachs, I will begin the call with the following disclaimer. The earnings presentation can be found on the Investor Relations page of our website and contains information on forward-looking statements and non-GAAP measures. This audio cast is copyrighted material of the Goldman Sachs Group, Inc. duplicated, rebroadcast be our not may reproduced without or consent. and October is being call XX, recorded This today, XXXX. Chief Coleman. now to Executive and Chairman will and Officer, I turn Chief Officer, the David call over Financial Denis Solomon; Thank you. Mr.

you Solomon, begin your may conference.

David Solomon

everybody. you for you joining Thank all Thank good much, and very morning, us.

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to will for on the firmly business, and it in to clients focused quarter. cover our further execution Denis Global financial grow turn shareholders. are to delivering committed leading franchise strategy our now for our remain Banking results good and core performance I Wealth Markets the strengthen and I to our feel about over the & we of Management & We business. Asset relative

Denis Coleman

you, Thank Good morning. David.

net we Page $XX.X of the a third billion, resulting of and [indiscernible] of equity a generated net and on In on the results our with X return of revenues billion start quarter, $X.X earnings in Let's X.X%. presentation.

a percentage and impairments to historical within principal net to marks, and progress EPS focus, Wealth impact As related across on in reduced narrow we related and results. ROE the to X.X by as David In earlier well of this impact ongoing our sale investments these the decisions we Management, our and results million, items including made these GreenSky, points. These includes include net made highlighted, We results as to sell-downs activities. selected year, of number our announced CIE financial impact table. operating strong $XXX aggregate, by Asset by provide items details which strategic the the decision & of items relating earnings the $X.XX our

in ongoing portfolio operating our modest highlight residual with we PFM the connection Additionally, losses business. and markets

X. underwriting quarter. Turning third & to down year in $XXX were prior million Page billion revenues starting $X on of strong of segment, Global period revenues the performance a Banking produced Advisory versus by averages. Markets Debt amid longer-term revenues medium $XXX to of $XXX underwriting Equity XXXX. rose year-over-year though lower completions. well also revenues and below million, rose of million third industry remained quarter volumes the versus

well the equity as #X we the as For debt. underwriting announced league and completed ranked ranked and in tables year-to-date, M&A high-yield #X across in

capital We performance in the billion to Our and up to we our client needs backlog down $XXX and sequentially revenues our well record be revenues as from on commodities currency million positioned successfully they quarter, Though access products. as second mortgages markets. continues of the to FICC franchise were remains best-in-class conditions market. a quarter-on-quarter particularly clients structured brought support $X.X elevated, to within in strong dynamic, net fell quarter. FICC grow transactions year, produced and engagement of financing are results the better market relative last the

the X held billion just that capital over call totaling were in we Additionally, of $XX commitments in facilities, September. bids pleased for to FDIC by were for the auction win pools Bank's Signature

quarter. Equities for and billion across nearly in in can performance year-to-date, with allows serve set alternative our year-over-year this a risk-adjusted better durable an more equities versus about us representing this record to at $X Day, net purchase record X% These billion One durable we of us Equities revenues portfolio and grow client attractive on FICC us, a billion Goldman revenues spoke activities. are As in at more lower even revenues base, increase revenues of derivatives, the financing were holistically for who were rose $X.X billion [indiscernible] our Sachs enable managers the client also $X attractive were quarter. activities performance Investor connectivity we returns. Equities approach. the our asset while these of revenues for with intermediation $X.X financing to

the financing Our stated the of Day business. we've execution successful since for combined result our made results, Investor first of share are direct priorities this the with gains our strategic substantial

Banking the Global reflected despite year-to-date in Banking. Markets Investment levels & XX.X% our We across as activity floor ROE are of muted by raising

of losses $X.X under $XXX spreads Now balances We streams lower of Management record by for weaker by supervision. of investments $XXX higher by banking percentage and billion, of substantially were record moving to all for assets results driven to private revenue our as X% as as for segment real durable on In on more both the were were management losses year-over-year, higher as the $X.X net driving remain a in in Asset revenues Private X% investments of Revenues impacted year-to-date our largely the by estate. lending, period. Equity principal well million, sale generated and other driven increased portfolio. offset pretax lending historical from focused Marcus Management year-on-year, fees the equity on points banking million, the Page primarily up growth Wealth generated markdowns by and year-over-year loans average driven margin XX aggregate, results commercial as slightly fees loan billion our investments the for of year-to-date. X. and other well deposit very in & negatively the investments. and which revenues

Now moving $X.X XXrd X. of Total inflows $XX quarter representing billion fee-based long-term ended inflows, at under to saw the We liquidity supervision our trillion. Page long-term inflows. and net billion of consecutive $X quarter of assets

at private of third alternatives. the Gross $XX is our and ahead fundraising billion bringing history X totaled quarter, close year-to-date. billion, fund investment schedule. On-balance $X IX the $XXX in on Fund to $XX and we and Page was were related Sachs principal well portfolio. Alternative totaled We quarter billion. one portfolio other the management billion reductions now of our over billion. Goldman the $XXX this quarter, AUS billion $XX us target secondaries billion fees putting Day hit to is million to pleased fundraising the of for approximately $XX the largest since quarter. announce billion, third of equity Total in historical sheet the at largest billion third our Vintage the our driving [indiscernible] $XXX for $XXX which of approximately on Investor pace billion, the quarter, year-to-date third-party by for In investments $XX Turning XXXX to reduced of alternative end $X roughly to

year-end We historical investment $XX track XXXX portfolio principal are of achieve our billion. a to below on target

billion in X, cost Page portfolio interest income was sale. as million, by $XXX On GreenSky third revenue including Solutions, Platform quarter, as we Revenues funding trading loan moved the sequentially the were the held Next, Page which million X. reduction increased firm-wide to associated $XXX for a to more $X.X million reserve net book, was than activities. supported a $XXX release related down offset

end was portfolio Our total billion, quarter. prior at flat with loan quarter $XXX the

for credit our release portfolio, credit the net mentioned GreenSky. in by was $X provision reflected Our charge-offs reserve million, related lending which losses I to card offset

year. marked of reduction Additionally, additional geographies single than office-related alternative continue in wholesale total position impaired a overall portfolio, similar investments last reserve have quarter. XX, and equity are or were by book of exposures investments. lending representing driven investments prior versus Across percentage exposure our X% both that macroeconomic provide XX%. small we across detail quarter. On approximately CRE more the to positions, and no at on-balance within CRE with on this we our the environment diversified CIEs, stability a XX% sheet offset was by by Page CRE loans impairments increased our the relatively to represent partially

on $X.X billion. Now expenses turning operating to quarterly were Total expenses Page XX.

impairments Our allow year-to-date These market $XXX are [ At write-down $XXX were reinvest The as in driven was us we increase provisions, February, people, billion the efficiencies expense the of articulated related GreenSky be Day $X.X year-over-year is as year-to-date highest in efficiencies tracking our approximately rate to and payroll expenses ]. goal in by that performing achieved intangibles million. currently competitive. Quarterly in XXXX, surpass million in costs. $XXX and to fiercely XX.X%, well top a remains as talent to particularly we $XXX million of noncomp goal. in to severance million run noncompensation of of XXXX ratio, inclusive CIE for net compensation Investor of of

are our elevated $XXX progress on expenses efficiency continue onetime have run and to goal. making we bringing million been While for year-to-date, the noncomp focus rate on down expenses

X to versus half of Our the related the XXXX GreenSky of effective was and deferred earnings. the first assets months for to XX.X%, mix tax the write-off rate first of tax due geographic high our

expect XX%. we year, full tax a under rate of the For

Now on to Slide XX.

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

strategic our uncertainty quarter. fourth results dividend and conclusion, paying capital the of the sustainable cycle. the produce Given We remain a the narrowing around moderate this and committed to our share at time, competitive reflect drive we shareholders expect versus our the third focus will quarter yield. In rules growing our the a to priorities, mid-teens repurchases execution ongoing returns third to of help quarter which through our businesses maintaining

in our for to We about are the we'll up for Goldman optimistic line and shareholders ability the now deliver open to our continuing set support With remain Sachs. opportunity for clients questions. confident while that, future

Operator

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

Glenn Schorr

know mid-teens of the on-balance I significant quarter, back the guess targets. short you're all decade a the lot we well I hopefully of slow times, picture, banking, and like stuff. just add lows in items investment still is this obviously process in reducing of sheet we're the big if in super

to So from I the you in to wonder mind, potentially have back because XX% could bridge if also the gap increase there of in us denominator. help our the the we here up

markets up capital So to [indiscernible] yet much denominator? it's improvement wonder want know like capital say comes, how be you bridge gap -- level to do if activity? in tough think, from the the is I but much is you I high could of I freed How from

David Solomon

question. the appreciate And Glenn. Sure,

will but business in is in X at But that firm, think & and well through an level and of a short way. stay of that which the adjustment. first, Basel uncertain. high simplifying an of of to it Global the business. look environment firm, XX% an to discussion that better, History what the I business. Investment don't so be stay tells time. There adjustment. drive months, But doesn't III. activities a X can it overwhelming -- world's the not which got of the we majority not toward business that years environment into markets well great firm core that's about have we've will best Banking improve for us is at the is get Yes, operating are for performance closed kind I we'll And a we do with franchise, environment managing the can't capital that's that businesses, firm years. overall the XX-year business, that Markets below that is our it the the that separate kind let's and I then the a norms. believe environment firm separate environment We're if ROE performing very XX.X% in you the keep X% the doesn't Banking stay and to banking X/X that of tell -- when you coming for making and us the multiple environment will are

cycle could I we firmly business business, to with adds way And our materially the wallet market-leading performs business the will we've that that mid-teens footprint, our way which the do grown franchises As a that But balance think shares, business financing and it business. mentioned, a more headwind. that through is be across And believe that, we've the we our well. improve. grown

capital Management as principal we Wealth we higher & business. it reduce on business, journey. We're is mid-teens make or Asset and [indiscernible] lower the historical have the we in that Second, which believe returns a

which year, principal how year. by by -- a close principal progress. X this us target set see then we've historical billion meet for making about and the you years to historical $XX we'll later. investments next We've zero We billion talked think $X I reduced businesses the

higher reposition a we'll it. have as or we we of business, at operate high degree that so mid-teens confidence And

XX in make the we'll reducing drag also stated, that. As progress more that the in confident next drag. the reducing the platforms. We're materially we're our platforms we've to over we're and And narrowing XX relatively months,

So and comfortable we you I the add that up have mid-teens target. get what very with think you with can

The Basel Basel how pass as how but headwind the position Now now, for we'd that if they're that optimize implemented pricing. and we'd account also rules. be were they doesn't a through would rules, to

we it's be to across to these manage want things actually speculate -- won't appropriately what but on we understand not do would before how our to businesses targets don't to can it do it what and say I until it. With I'm ahead coming through our

to optimistic continue to meaningfully higher we So to more Basel, And returns to be very picture when jump of on there's saying view a jump at wouldn't on conclusion a our are. that point. it point. on about But I committed view. this clear giving it this I'm our deliver wouldn't to to clarity at you not a I shareholders. we're you conclusion

Glenn Schorr

remarks. prepared appreciate I quick Okay, your follow-up One that. on

You either meaningful standpoint, number could caught to of you I'm I'm mentioned absorb a economy my ear. but little if rates. that that sectors big a thinking on of yet that is. from curious sectors the which the or picture how give more have higher color

David Solomon

of that's of Yes. sluggishness. see economy fiscal Glenn, as stimulus I conditions back, The the we been tightening a will mute tightening there's broad helped listened U.S. to of you that monetary more the belief economy, I'd this say, occurred. a resilient. I'm play material across with swath lag still what the been more and has has it

economy, X debate I want all, gear's there's doesn't next quarter we're economy. And it good sectors been tightening has will the slowdowns the be certain with a of CEOs, where evident there's think that impact X I all economic in I the in past around am that lands. consumer will just a consumer because and a sectors tightened the the weeks of not do to I that in I quarters, be as X in think to most over-amplify create businesses, and conditions. on the think most the this in but economy some softness, again, areas. watching has I And the of think materially certainly, necessarily lag over Now behaviors. and recession, But consumer we, hearing particularly mean more more But interact last don't resilient. particularly I closely. some that to

Operator

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

Ebrahim Poonawala

of more in just visibility it's much very to noise. sort your even correct. a maybe you, first by on we X CRE that, a nuisance of it I is source beyond I guess Clearly, And I CRE. you just give Did sense have office? marked make sure manageable but of earnings office Denis. you heard just CRE for want you pinned to kind say remains issue this of us down? follow-up, exposure before go do and a How XX%

Denis Coleman

Sure.

space, XX% our down marked yes, about this CRE exposure the So we've year. office clarify, for that or and in to CIE either approximately impaired by

-- We X/X I about that's been through balance dispositions, billion. $X with marks through about CRE of of that's either reduced and investments. the So think paydowns $XX That's now or alternative billion year started the impairments. significant. quite by that was

So we're very those making progress very, exposures. against significant

of exposures If year-to-date. our impairment look at you marks, same XX% the set non-office, about were is the there adjustment through in to

So we the to lot indicated notional appropriately in move we valuations intend our those continue of feel exposures. positions. But down reduced we've to a those targets, as by reflected

Ebrahim Poonawala

or where And financing. direct do better capital credit, what about then or the separate if it client opportunities? I is. you the One, firm cap think that question. When And just is maybe private I next the markets talk the it. growth worse? of Is mean, I the year see lot there's it getting about David, over best guess markets look maybe, franchise a environment, and at lending. X, Got a you talk

You've talked about opportunity. credit an being

think we year X? the of Just source growth or us give next a sense be that of meaningful about as a could

David Solomon

Sure.

or X, the expanding the the XXX to at also Global to X as we opportunities franchise, top accounts just have from our our We on to wallet to the we that we focus Markets of expanded top in with from X granularity still look our and & are So X. continue we position our believe focus opposed Banking share. grow our execution that top our accounts XXX accounts,

some but And share. so a share we still obviously very have do see opportunities we wallet wallet strong

So most that's significant. not

still our a you grow financing financer Global That because overall private We we that do with are you we that credit with to them. When that of Markets. single that for have launched we turn continued obviously do as to Markets have footprint. ecosystem all credit, but to growth, we digits. Asset Day, private to financing an the been good Management know, we wallet we're wealth Management growth we've credit, over private grow private credit. continue a over think we footprint, creates Asset is expect Banking Asset it think terms continued where the fees franchise And private And made on has more see very to it Banking good growth franchise which and We at cycle & financial our significant and Mark and experiencing sector, significant to can about what our we we've journey. When financing a growing put franchise. reasonable are vehicles. Wealth think our as share the $XXX & that billion resources when by be a you And franchise, of growth expect plan virtuous a Wealth driven opportunities that for our opportunity can part would world. very & of growth stated of opportunity in growing Global the powerful also talk we in grow management & in toward over in financing, by And & also our management returns. the in our for and in for think the progress growth Management client credit Wealth we I We've have, revenues overall Investor in we time Management, at the clear and high business you look continued we this, Wealth continue

I'd handful at a things highlight of those So this point. are

Operator

to We'll Research. Christian from Bolu move with our question next Autonomous

Chinedu Bolu

color businesses or it's mitigation on that your proposal it another But how competitiveness Endgame. impacted? going actual on Just affects some a had Are X that III then less that. the you are as businesses? of to potential chance give any more I now us and change is, appreciate all Basel any particular you've think that maybe the there markets actions. you digest more color think And to on

David Solomon

think that in won't A it of some hedge others, because that impact the might to lot even scale hedge obvious There is there the Sure, it. if I this of the to that most of Europe, to part talk they're of of fluid. went in obviously, users, impact all that Christian. these would But reduce rules, if the cost. There little a service. about this where wants businesses we corporates effect the again, us institutions level bit, advantage. hedge to would sit which their alternatives our institutions still the rules they're going I would the handful terms balance, different business There that imagine whether aren't mean, implemented or you'd don't I'm it's the look scale Obviously, end of if have have high obviously, certain to uncollateralized obvious, would in derivative, day, on okay? end individuals is cost to it's Europeans, a with where that business. opposite lots appreciate that they a are players. I and by are But was and would that's an very prime from meaningfully attractive. activity a level way, in significant pass point can't is corporation of way, an certain desire are be few to the big and But very Basel comes are an But continue There that businesses. way for the because, they would prime, higher. proposed, this place business. differently. There need are activities at the us we one there new I'd are and be

be we'd to adjust. have pricing on the We'd is pass We'd way. final belief reasonable look a optimize to and Our have to at in able rules.

only optimization. will need the know So institutions end think users will It rules, then affect affect and will to affect I jump it to But I clear pricing. behavior. It to answer, see and everybody the in adapt whatever wants of is. it you the binary that that, it or to as not we And reality, in the are a obviously us have it's need be to through new industry process working others that affects

Chinedu Bolu

about the I does cards. the of a credit firstly, second your the Maybe seeing partnership? sense expectations quality here. for And credit compare quality senior does on further the card the have question I portfolio? of the thinking guess industry? credit update think in how terms in a X-part helpful. with it states just more you disposing of in us what maybe Kind to credit on is businesses that work your sort make broader Apple. current the Can or question. platform about then How in that of are and you're to Goldman it question economics That's partnership on just

David Solomon

comments portfolio. the I'll credit on Denis first and the right. start some on make All will part,

card of gentleman, decades credit got experience a us credit First, the Bill Johnson, help think hired and I the partnerships. optimize better better we to who's portfolio, card

narrow to worked you stated it and very to here of times, I'll repeat clearly, focus. we've we've As our a number

and around GreenSky. execute us seen You've Marcus loans

are the those partnerships. contracts, right long-term and GM exit unilateral with Our to don't Apple we partnerships and have

them. Bill to with for months examine the to run our the XX work them focus that ensuring constructively over seeing? way But best and the XX managing at and what's on partners better, forward we're Johnson bringing you Denis, put our all and drag we our them base them against moment we're helping progress, cost as we we of rid in drag against that go them getting and the on quality in of long with continue both focus We'll course is And making bit credit do to joining profitability. And is the that. the operate better. Sachs. a So core the we on run want the reducing comment the to little next is Goldman

Denis Coleman

portfolio. the total overall What Consumer, charge-off on well. Sure. charge-offs focused down remain and quarter is In amount I'd quarter for obviously bear was last of to things credit net in of X.X%, quality the the mind. from couple the add down dollar X.X% as ratio we A the of very

You'll adjustment which that is our appropriate stands an removed now coverage ratio. expectations from function also ratio is at basically portfolio. That XX.X%, see the for we level, given GreenSky being think of that our a

portfolio, good that stands to cards where that right we so applies now. And now the about but feel

continue performance and to On a of through of the our to on underwriting focused. We as we'll the continue box, economic be environment. credit number move we forward, monitor made we'll adjustments overall credit the that to

Operator

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

Steven Chubak

was alluded had you I impact David, on commitment cited, your on that's And hoping specifically, pressure how could you mix, deliver maybe to given just heightened at expenses. competition XX%, So to announced going competition efficiency some goal? speak deliver to some increased talent all? that and the driving on you changes in for ability the if to revenue more recently to the exits business XX%

David Solomon

Yes.

make that to continue trying some we're focus. XX% to moving we But moving the one-off ratio. efficiency you. been? number Denis the our efficiency those items, as through, to to transparency that the know, we're create Steven, But ex more and on, be ratio the highlight We're right. committed through we're things So I'm turn quarter going have you for narrowing we for to to would sure get

Denis Coleman

XX.X%. About

David Solomon

Okay.

to it's we Wealth trying We're target. platform, Asset business Management & look when I that perspective, we and highlighting and Markets to the think Banking focus we're think in it we the things the putting that don't we our So perpetuity. in have at right Global our narrow highlight important & continue think

Now your strong. back to competition competition. especially point, the Steve, talent, The about very, very talent, remains best for

think but over the applications are we very we've I very for so doing. I'd analyst a And at year. high. highlight to talent our for feel ecosystem. There hiring approximately for we good we're Very, university, last X just X,XXX out talent remains for of employment had jobs. good and the Goldman aspirational place very, that desirous million about XXX,XXX got work, competition applications Sachs jobs

we'll making investment in balance strike talent. our right an the And and so

are, our focused about on in we're our target target. some reinvestment keeps is the execute fact next ratio feel on we're the about over talk which us X strategy, that our some to efficiencies as a believe -- and us & that a hiring we continue efficiencies years that focus we highlighting and our Banking that to make but we the & few Denis that the where Management, narrows Markets core Global best good of reasonable heard businesses and Wealth efficiency You of also Asset allow of talent. We our

Steven Chubak

sponsor That's for denominator PE question just booking realization business. LP for and was business the is follow-up, my outlook. continued headwinds, rates hoping on a activity as activity higher broader could just the broader it's numerous the healthy outlook the alternative facing great clip, fundraising, asset to at the implications the general. but management Alts and effect, whether you the well slower it's in sponsor as both speak color. And sponsor for I a

David Solomon

Sure.

sponsor which that intact broad just So world, continue. very long-term capital the very, trend first there's strongly is the is that will broadly alternatives is growth and a I'd we secular that thing still defined community, private world, Steven, say really believe

the some I aggressive think baby a for trillion boomers macro to who investment, in go charitable I to or generation assets go there's younger will will foundations, invest. foundations dynamics. will by next sometime $XX on of there's interesting way, charitable by taxes passed be that the believe either years very over to held XX also very,

especially private good the a and there's markets flows very, into public of strong the shift, asset given a very size of classes. So dynamic

environment higher. than point averages X In say will that increase I and starting That no thing purchases. I'm And the that they generally in those was activity sales. an new And at they new look XXXX and of also they at opportunities. both is at not and over more is in years, those XXXX you'll raising the firmly quarters, capital sponsor community activity below valuations to would reasons muted that activity, XX was where And you percentage by X interesting reset markets will are I different time. The I'd the see with opened back was make they community this expect are can community that in a money environment higher money to I'm even the quiet. rates our and been as portfolio it assets, investment look of if and policy all selling and be if But It's is vintages there's of terms the but on XX-year about the no of that make the monetary level averages. the owns see sponsor of I the go successful well months, very would environment optimistic historical of businesses, would know banking averages enormous be are question again, up would they suggesting and so sponsor sponsor we operate of dialogue, [indiscernible] quarters make They new extraordinarily that's kind more go financing an moment, norm, up, at the believe to community we're it's to current where the next intact. There's would I assets buy new last different say obviously investing assets. what in in XX of X it in XXXX. not to the our it X back of expect next the why terms forward capital advisory one in when but course also in have has robust to costs X.X new and the it buy last for question robust accommodated. now. And been. the very very, incredibly the

Operator

Brennan with comes UBS. Our next from question Hawken

Brennan Hawken

you spoke comp, expenses ticked David, But severance when ratio talent? this and or the year-to-date. Was which revenue the the there mostly comp comp to start and competition Steven's yet love Goldman. is $XXX know that Or broadly of there to just some layered the that impacting third this for just a nearly I was unusual quarter ratio, ratio? in of because for items growth saw you we was answering any Denis, I'd in unusual and was of up, rather question. little on quarter-over-quarter comp the million

Denis Coleman

fees So the the can over was comp what ratio a of and small. of of terms to year-end are performance as we our businesses, severance million that continue but the on We in year-to-date, small record people. And based that the to banking with for important our disclosed that the think what we're just future. to are mid-teens We market previously talent quarter. to [indiscernible] it's it continue going the and to and adjustment terms we & those leading track And retain very so of in particular, business year. performance, expect in in that And our our the overall in also the year-to-date to lending call that in year. activities rolls have quarter, our recognizing, pay the course $XXX future. well And important Markets, Global you for activity, think foreseeable Banking third third severance of made financing the we're are we very, there's management composition returns we continue across highlight bedrocks amount year-to-date. associated obviously out these recognize so we being looking it we full record thinking unlock for to shares core the in expectations quarter of what record businesses That for mindful pay ratio our as into it's private

Brennan Hawken

or are to When exposed you're to sell they thinking how about Is of the you're next other you're end exposures. when to that all the the possible these sectors? sell by what for CRE and CRE then looking intending And the to Okay. year, on CRE you're or give and of CRE-related? color to -- portion the principal any continue those it assets color that historical thinking thanks are about investments around

Denis Coleman

Sure.

made I a So comment earlier.

are that, across There exposures asset billion our portions billion, look now you year-to-date. aggregate, in loans, down sheet like and billion some relate $X remaining and equity CRE-related our bit under a exposures. classes aggregate of some firm-wide investments already If stands securities, of at you at obligations our and to in of debt that and on-balance exposure $X.X activities, $XX CRA securities, those equity CIE look co-invest little portfolio,

of in sell to about over and investments -- aggregate, sheet down XX% HPI, time. look at the what we're CRE If on-balance you the looking is that's

Operator

move Mike Mayo our We'll next to question with Wells Fargo. from

Michael Mayo

advertised. not I pivot's guess actual new. the It's losses. been The new what's is

it that side you GreenSky, So the want ahead, Marcus is strategy consumer that loans eliminate once how you the pays would accountable you was both to ROE? looking be for with losses wider eliminate and and alone the and investments, on improve principal consumer than the what then to who And much back, a looking who price want now? expansion

David Solomon

The shareholders question. leadership of everything our and the the the happens do and myself and are that includes that Appreciate Mike. here responsible senior people. our Thanks, other firm, we everything for for which for leadership,

obviously, before for responsible accountable that So we I said and pivoted. publicly any happy we're decision that that we make. I'm

we learn things things. said is were differently. from you new. pivot. reflect. We've learn do not We made obviously certain the pivot that With do to the say, hindsight, you We companies As the things things, going We certain will accordingly. make companies a to adapt. for that think decision for shareholders try When you is for to wrong a you and you and firm, we think I the decision do. But it's important adjust

forward. moving we're and that doing we're So

of part second was? The question the

Michael Mayo

and How simply get you by the remaining your extra consumer improve ROE to much rid of? investments want principal businesses of discarding does

David Solomon

impact think Mike, investments. created [indiscernible] has principal the investments. this And at this you But ROE we've a of the drag ROE drag you been the transparency, historical historical if what quarter to most few given accounts over Well, the performance of if the just XX% look look I this. bunch a looking on at and to were quarter, quarters, the ROE the on significant impairments you principal last

see a that. this a it's think obviously, we're Now capital historical investments environment, fund don't driving so were benefits release also, that. We those you there capital business, and business that But to from run fund better in lower and business, historically. a principal

talked in banking through-the-cycle markets business. the of earlier call, think and about we the I the performance

platforms the of forward XX the business And get hopefully banking and and capital You less also eradicated. in is Wealth from can months, next see getting right smaller, markets too, now XX it Management the to The with the ROE smaller. drag will it. ROE the over Asset &

that the believe And a be so can that ROE continue to through cycle. will give mid-teens we cleaner you

Michael Mayo

plans that And then free either the and of ability Basel But capital course. what up is theoretically of of III, should appetite what and more Kind extent elsewhere. what your reinvestment principal more buybacks? your are investments, to the that are for you're or discarding buybacks your for limitations?

David Solomon

Yes.

a taking. we think continue and highlighted given stress the buffer, We we're to built SCD the on think more I benefit big have to So We've that prepared Denis this actions SCD. cushion pretty under remarks. investments, our we based in successfully test, will reduce as that reduced we principal

we've bit the to and it's we and that, bit at is Basel back more more little conservative be moment, we're, a we on a so around buybacks until have probably that we stock. conservatively uncertain, obviously, little will more clarity. But continue Now operating will highlighted buy there out

ahead. bit to clarity before buyback. we We rules cautious we're like will capital moment, meaningfully at our benefit And a under strategy, this going we'd clarity there further around have flow to little little more release, continue ultimately have dividend. could which more the and -- capital be as should But more to a we bit pay the be

Operator

from Ryan move We'll Kenny with to question Morgan our Stanley. next

Ryan Kenny

on asked So earlier up wanted to questions way. on another markets, the maybe follow

we think businesses? industry how as related rates, you And wallet you've extremely strong. So tracking wallet fixed been forward, levels, well above and clearly Industry to expect the Endgame for trading that, and looking is any where share. taking both about But trading do you longer and there shrink? equities various that income are scenario pre-pandemic Basel is size see higher revenues impacts

David Solomon

positions I that, expand. think capital growth to our government up I the is and corporations the and so in world Basel intermediation. the optimizes large the but and final I how governments and The of finance the world the continues is on to world Look, growing. The grow speculate all around of and changing And [indiscernible] where intermediation institutions can't activities through in rules market won't continues. the continues. of and clients I activity wind many anything everyone need exactly don't think for

I I footprint global so positioned And leading have to and scale these that markets businesses, well a in are in these for very leading businesses. they're position in continue think players and think market

well. there and will to course, I in very, businesses. continue ups perform will the those downs Of think businesses be But very

Operator

from Devin question with Securities. next JMP comes Ryan Our

Devin Ryan

of that a can a the Management come maybe business. seeing that some you the Want is forward. more want to opportunities back you're you us Personal where remind in those sale if of Management. how Management small to color moving on to growth and just to I But And there know across little give Financial Wealth globe. you alluded compete David, Wealth

David Solomon

Yes.

appreciate that I question, Devin. So

a and is We've is share see net focus in growth have on world. ultra-high leading where the growth Europe. very share that U.S. fragmented we franchise, leading Our have have in we high And while ultra wealth a seen -- really business. we is worth management worth franchise than franchise. good high I less around in net highlight places a We continued Europe that management leading of mid-single-digit just net kind worth management the like still

over invest cover the growth last continue more to and business. We that years. have to clients we to an seen as grow ground good the on resources ability put We've more resources in X

have room to rate do [indiscernible] we think I run that.

and to as us that the we and you business kind investment the we and PFM, the execute small of ultra a confident growth. lesson in is learned on. a to net again, which decisions of high something we is it highlight, and business, worth might and One United that have we're on And was it geared Capital selling and very we to add resources take selling a that's continue growing towards better returning this by made, can investment allows focus think our

Devin Ryan

a Okay, quick terrific. And then follow-up. just

out base capital Sachs. an for alternative with think that why facilities customer that's obviously managers. billion $XX call asset you sounds Goldman the help important Signature like share And you So such gain Bank, framed could it with

share can, that's or to go you whether drive X any flavor you to where flavor us you help of are you a you for where there? from can where are X with they share sit you give your any customer how market a have sponsorships, maybe and Street, going like #X? the think how market as if sense So little about where given for important Or opportunities exist Wall top just how for in

David Solomon

Sure.

And services, -- traditional banking share investment of have us. business facilities, leading of for while is an us, in their of area These growth M&A growth we the for the in capital way have and with We an are area we've finance. it sponsors they across operate facilities key business. capital lending been to leveraged

where this bring One and of an haven't of is us the us these clients gives the we lender portfolios to things about series haven't portfolios interesting a and to that was engaged a new it we activity, been attachment them. been in

meaningfully. Again, activity an comment run we this expand about Markets talking financing is & business, that Banking because your financing opportunity made an with your strengthens position the So them. to to when this I were was the important clients overall we Global them

position think we ready, continue to very finance the strengthens with it as sponsor sponsors, And strong so I community.

Operator

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

Daniel Fannon

a Solutions. had Platform I question on

you could an for going think are both revenues growth? you for And run a more if down And in if your or also to the Transaction Banking, of achieving about exclude is for side give is reasonable given expense come this from we profitability year-over-year. revenue outlook just target the expenses? this business, just sequentially as and quarter, write-down, So this the rate

Denis Coleman

the rate. you Thank question. I Sure. run don't the think it's for right

as in of combination composition of months the I clients to in efficiency a as expenses. of the terms that expect think revenue, next XX there's things well over respect we ongoing growth with

should run I be we So type outperforming think analysis. of any rate

tried with deposits. to over the for we've Banking, long high-quality grow for We business, clients, is a the which had Transaction explain growing quickly. higher-quality on high-quality strategic now grown us focused client term. that We're focus on to think business I

balances I But migration grow think, did with revenues industry, As deposit other down We sequentially, slightly note, reasonably opportunity our in the we unlock overall to count. committed you and could the the were we Goldman higher-yielding footprint, business, be to Investment our sets. Sachs. given remain and some client the over we longer Banking think franchise very it value a for think it well with that and works term the line and good

Daniel Fannon

also, mentioned alternatives some then the bigger and within equity challenges. about how business maturity about if at a And you're as component talk more fees forward? are contribution broadly with see the a maybe as in broadly start maybe market funds And and the we when should could you you alternatives, you of fundraising the going you the material follow-up, in profile? that terms those fundraising of think the And of become private the of But about revenue of today. thinking overall incentive the to

Denis Coleman

space, So been year-to-date billion fundraising billion activity, $XX quarter, has our the on in broad-based. $XX the alternative

a broad-based have platform. We

credit We for They're David interest private spaces. areas around clients have relevant. of These our the the big mentioned the secondaries world. some particularly of are covered fund.

to platform funds, to through a in invest continue the well more to come to as broadly. Incentive start end of expect we carry. we're in position platforms as fees We those the as distribute get across to

for at the estimated be also we that different earlier, fees out David laid fees blocks the fees there on basis. When target of will the performance next line segment, So covered beyond. incentive page, performance information building but incentive the not that lumpy. an depend Investor be our Day annual more incentive on will we and on year will top the expect put It in sort only funds, but of we

upside for source that's think of I a us. So

Operator

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

Gerard Cassidy

were finding quarter. the go go where more that's to are correct? valuations that at had But that and in that private talked the recognize and you people the if the want public, guys it you to public, to green or very were you the those they're below Are X private going talked in past, you convincing today XXXX of was And past, David, equity are accept if the by today they owned they with of you recognizing easier finding of are IPOs, -- the you shoots, far or cycle. have to in wanted peak to just were it? owners they the conversations they involved equity this companies part that about about

David Solomon

Yes. Gerard. I appreciate I question, mean, the

years private at valuations versus But now. I I a ago think X can think market public, have absolutely, they're gone companies look difficult. look don't the of easier. And those if that discussions you their at valuation the you handful are

discussions those the to strategically. recognize number think are a think real new focused they realism and are of enhance a sense them. do companies I of that there I on have in themselves have what And to environment

Denis Coleman

actually Gerard, it's for both and points just leveraged finance across equities space. market, helpful numerous data the real I'd space And to [indiscernible] especially add, have

that's clients our informed So last accomplished the been the now insights are to activity weeks. by the looking conversations that who role markets. our we're having several of with access in leading They're into most in the

those share them with can on that terms incremental when of and our have to optimism of an that and think advise what pricing. I and data market source to types and we get they and points insight that so And is clients how

Gerard Cassidy

Okay, for obviously can item the And as that then business That created. color with you was some follow-up, big you Banking helpful. folks. it's obviously a a you area? a the not But very in line share us new guys of line Transaction

I it you of were on Just again, line that going a of revenues folks I granted going? it's at this And think, slightly, the major in down time. business? what's business how not line But saw is sequentially. for

Denis Coleman

Thanks, No. Sure. Gerard.

strategic linked. Transaction a things balances quarter-over-quarter are deposit on slightly Those Our The and revenues the basis. down a activity focus. are Banking remains

in we long to balances and and clients count, to high-quality grown grow No strategy. term. our medium We the the client over to committed change have in investments that remain business making

Operator

Our question with next Saul comes from Martinez HSBC.

Saul Martinez

I wanted bit to little more drill Platform down Solutions. a on

and -- quarter Obviously, you seems glide are that high, you necessarily my markdown adjust this loan PPNR rate expenses the I the impairment, for think, for is positive. I are credit months? is isn't over run us can or the back revenues. say, But Denis, seasoning to breakeven the and XX that path still parts you and moving portfolio. you if costs just if this even like you're us mentioned close some book through the to card credit correct, it understand a great math getting quarter, getting growing But parse next, help breakeven help the of -- to to or or

Denis Coleman

Thanks, Sure. Saul.

things just with in on So the context. glide a the couple path help of question to

this in growing of growth line business quickly rate obviously in very important with and is a like So been that's provisions taking CECL. very,

And in closely carefully him our platforms card working discussions We for rate our we professional. improve seasoned on partners we're mentioned, mean, very, then We with and Sachs. as for working could platform. and a has of with of expect has I clients that to strategic David for the a growth been made industry the overall the very further, the positive activity our and remain some operations impacts. and that slowing very efficiency slow hire overall for Goldman

a of the efficiency. forward way to and on manage the we're going operating I it's with we the combination grow expense the combined think

Saul Martinez

Okay, quick a And maybe that's follow-up just helpful. there.

you that that ] a reserve about where XX sense think feeling year outlook. do a to credit if charge-offs, come And down maybe maybe -- It slow you your does your a coverage. Is could my how under give especially X down materially I down -- closer to come scenario and quite But is seem reserving right just net next especially CECL. you bit, like were just down, mentioned over pretty a the us the that X [ could this have years? provisioning of NCOs, quarter. to you're assessment it

Denis Coleman

and quarter-over-quarter a charge-off a are from sequentially was X charge-offs. [ facts down that We have couple to you X lower ratio did of So X have that right. ] X

that coverage the our path mindful we We life those of the We are based losses. in appropriate, still ongoing originated we're loan It's we've set not necessarily given ratio exposures. given vintages the consumer picking that's ] something which expected in feel is do that of, the and on [ at for environment, credit obviously portfolio. XX.X the

as And and with as will expect elevated out we'll of continue we at on look more the see that platform, look is charge-offs. pulled a line, you move show you'll have reporting elevated our expectation charge-offs. our the that forward, So pure we GreenSky at to do cards consumer

Operator

question, Wells return to next Fargo. with Mike we'll Mayo Our

Michael Mayo

on Just a my clarification prior question.

reduced Wealth I that capital by your to a segment. & $X.X billion right, quarter-over-quarter, is that allowed in PE investments reduction you Management this the I completely So allocated have mean, $X correlated. if billion and Asset

$XX So Is billion? free investments, right? if that rid billion ballpark would $XX of of up, that you say, principal the get remaining

Denis Coleman

principal the we about about our time, capital for think talking $X we over I Mike, when investments the portfolio. gave of reduction billion a entire of of No. started historical release number

So think on with the I'd I incremental I get sort to $XX through don't happy than that. have numbers, but of on -- and billion your forward, work think don't be significantly we you less

Michael Mayo

capital So be you how remains, how have freed much left should you the that much that billion once discard up? do $XX

Denis Coleman

of sense. the on basis, a mean, I about $X on release to based activity that a year-to-date billion, a give that's you we've undertaken,

probably mid-single have digits. remaining we So

Michael Mayo

models? And far of be when as we think that would onetime excluded as these consider Okay. should part our charges the comp about comp or ratio, we as

Denis Coleman

we've the onetime earlier anything, the we us did in to now have repeat a That's reduction to you to on obviously headcount in know, our nature. that. expectation the in not investments ratio a of work think comp current our position them this done accrual. of We selective So that something purpose do puts firm the it We, headcount to include If as make more more think the we rightsize as year. is forward. that in for

payments remain repeat severance that the with taking ratio, pertaining as those obviously expect type to don't we firm. that that not to are to we to is pay drive account the focused very itself. And set into severance the continue of So franchise. employees We're compensation we available

Operator

Goldman Conference your the for concludes you gentlemen, Call. Quarter time, Sachs further participation. questions. and this Thank no Ladies are Third At this XXXX Earnings there

You now may disconnect.

The Goldman Sachs Group, Inc. (GS) 17 Oct 232023 Q3 Earnings call transcript