The Goldman Sachs Group, Inc. (GS) 18 Jul 222022 Q2 Earnings call transcript

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

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

Let the David. me call pass to

is continue supply that events, unusual economy. CEOs me their supply big both the persistent entrenched And dialogue and Ukraine. particular my tell the morning deeply are environment chains. material all pleased is Carey Thank asset global see geopolitics market the with they Thanks, a they and with the more macroeconomic We is combination conditions having prices, performance operating in and on of about joining pandemic inflation this demand am no this being see period our namely everybody. good and quarter. There affected confidence. complicated And businesses, exogenous what’s and activity has that us. to inflation that I by market a in impact and you gotten question war for in

lower The be that second uncertain signs we answer in very the year. all of Our economist, half meanwhile, say are it will inflation and closely. is the watching will there move

shifts be uncertainty. resources there I more light policy economic cautiously and And going seeing to of the going monetary Given those there continue we will tighten more will expect is are be dynamically. volatility our in and and all conditions. to current environment, shifts this, is we all of to in manage

and this our risk is committed firm. navigate us and culture this that medium-term to changes That we for management clients Our for our capabilities are our help the said, environment there strategy nothing and should about environment targets.

strengthen strong global and the firm. remain continue but action differentiated on footprint. expenses, also environment, a franchise have our and we we from to will businesses on taking certainly service. their we of grow providing light We of and client focused In and benefit our diversity are We the invest capital to deliberate

second $X.XX of financial now me turn an revenues quarter, to Let and XX.X%. XX.X% and In results. an net ROTE of of and share earnings generated per of our the billion ROE we $XX.X produced

Investment one to book And X% markets though year-over-year In dialogue client number the $XXX, in continues declined, Our quarter XX% be quarter-over-quarter. our up we share M&A the capital and activity equity strong. and and adviser remain value at per engagement finished Banking, capital markets. has

us for in franchise. leading to market and a week, This global, our quarter our dynamic strategy and and be again our clients to in global uncertain broad expertise execution markets Each environment. deep turn reaffirmed

executed In in Our proud clients faced improve revenues performance very net that our of am the diversification achieving record significant market quarter this meet segment. investments this sheet to of after our risk help headwinds manage needs. we as have share and I we on-balance environment, their XXXX. financing high strong our our businesses demonstrates across this consistently fact our the on strategy

and serve sheet further management expanding are consumer, to markets through our we Our were management reducing management remain in resilient we prudently as on-balance digitally, investments asset and our fees wealth segments organically both across growing focused on fee-based streams allow. our other platform partnerships. as revenue and And and individuals

This strategic a in to capital than this over it year recent test results. Denis, to to are density over improvement we Federal improve especially past. because the reflection our was minute in was said businesses of efforts more the let to That stress will capital Reserve of the in glad making buffer, evolution. our light the particularly the our test our progress spend of I is the challenging reduce me advance requirements capital turning capital, Before we see on in our time. in order a stress

over of Following and XX% declared $X.XX our dividend also XX% follows a in increase in quarterly share. the of Board stress test to XXXX. Directors an results, increase per XX% our XXXX in This

our our will decision this to navigate results to the reevaluate. plan X Should turn I GSIB driven the we environment, our more activity in and last the create shareholders. executing our and value X% over years, surcharge. buffer, now over regard accretive a with we sheet client-oriented drive as ability face, it This quarter delivering remain it strategy to to for balance our Denis cover addition, detail. by our to our while to market GSIB current financial our over change, is needs. closing, returns by targets forward the will consistent continue in the confident naturally conscious In with In serve grow client is organization operating to made environment time. we client to we long-term Despite for clients uncertainty a well recent support target intention these as I

Good Thank you, David. morning.

earnings return on of we on of common X with of XX.X% quarter, billion per $X.X revenues equity tangible and presentation. of of the start second on We our results the and share return resulting net $X.XX. a earnings XX.X%. equity of Let’s In $XX.X generated reposted net Page billion, in

generated a billion. Advisory of performance starting Page Investment billion, XX% revenues $X.X on Financial by segment, to X. Banking Turning ago. versus revenues were $X.X down year

we underwriting Industry muted table M&A $XXX saw sharp the we revenues over global once $XXX to volume remain one our remained improves. clients Equity net further lower ready for net closed $XXX Despite rate number issuance levels for increases strong deliver Our of market market of where position. this, franchise quarter, remain ongoing million. the deal in activity in deals we for our given million, billion amid approximately XXX as market backdrop were the the revenues quarter. equity strengthening Debt underwriting volatility. league volumes were

Transaction more lending offset ago on were relationship approximately marks hedge from levels innovation if gains of from commitments client now the healthy some generating million and in backlog driven see XXX% our continued softening serves associated clients nearly strategic Banking billion based $XXX dialogue backlog Banking we defensive from is Revenues growth roughly market our environment but versus Investment $XXX it up year-to-date. million, our XXXX. our approximately feel end the in levels our business. our technology been repositioning to XXX our saw revenues the $XXX book may from about the in The at in challenging in of history on acquisition activities. point $XX a good that second peak than that of While has with has span at lending the quality down higher and We certain portfolios, year it last still million corporate quarter, prior to year, any financing deposits platform is than persists. We by of

client in clients segment Page facilitated net by a quarter, for Global the significantly were was higher as the volatile Markets risk billion activity driven $X.X to year-on-year. revenues quarter up intermediation market. in on we Moving Growth amid X, XX%

strength businesses at intermediation were with in our FICC posting our second In FICC we billion prior of and X higher XX% X, increase the on revenues Page revenues of Looking saw the FICC diversified revenues franchise. breadth X quarter. net versus the $X.X reflecting a intermediation, year, in

while franchise growth rising commodities. commodities in strength volatility tightening FICC we and net repo mortgages, Our record drove strong remained clients in monetary were help incredibly year-on-year And which and revenues in helped rates, in and delivered in policies lending macro continued Meanwhile, saw currencies. engaged. credit financing, This activity, active remain revenues mortgage as across considerable results. navigate we lower rates, clients and

of revenues more XX% to environment. $X.X in and of financing quarter. fell by also FICC financing performance challenging quarter. first second markets XX% higher for in forms due of a drove net various record versus clients. demand the was ago Global is equity activities, versus market-making billion. our year-over-year revenues Activity from a a billion $X.X XX% Growth this lower with Markets the rose of across to quarter financing Equities Moving global grow volumes. volatility financing, issuance represented were our X% Increased client nearly overall revenues revenues our a coupled Equities intermediation year primary financing, equities, to levels reflection solid equities impacted in strategy of which

Page X. on Management Asset to Moving

than of the gains by million money investment million our year-over-year. contributed of private revenues. declines quarter. generated recently billion, more up $XXX AUS of quarter of $X materially management totaled over roll-off in billion of $XXX experienced of the billion million, end. $XXX million and approximately Management fees sheet portfolio, equity Management the during various portfolio the across of event-driven our completed In other and fee than Growth sharp investments net approximately More on was of by This waivers million Equity value was produced XX% incentive the to billion roughly NNIP, net on positions $X.X and from other incremental losses acquisition by reducing market the specifically, which the we second losses, market at generated Asset were management on-balance public lower quarter of fees of roughly our increase $XXX of revenues we $XXX portfolio. addition last $XXX this net year. from from funds We of driven driven quarter. net losses portfolio, and $X.X the fees portfolio. offset

to We our the approximately by focused of partially migrating of business operating billion second investment on the funds. third-party in $XXX had commitments. our we over quarter, alternatives million more These of remain in of to technology million $XXX and consumer were offset particularly Additionally, strategy marks, raised our sectors. And revenues revenues entities. we $XX approximately related consolidated

by We by of offset of equity to due of of $XXX were micro net revenues mark-to-market persistent in Banking. management Wealth difficult produced Consumer of widening. volatility in Consumer investment was million, to drivers equity a partly investments. higher The down revenues income harvest the year on was XX% Page versus making harvested to approximately record million over realizations and asset driven up a also with turn ago $X macro $XXX Wealth from markets, it assets. spread and on-balance activities Management and Management We million Net sheet our in $XXX I $X.X debt by & both ago, quarter, billion net quarter losses in this year more will lending pace billion as revenues net versus second XX% interest X. influenced both

rose billion average driven $X.X versus of fees placement assets fees supervision. other under last higher and and year, management XX% higher wealth quarter, the For by

While net revenues private XX% banking million year deposit last and were and quarter, down were record versus in higher were to XX% lending the quarter. $XXX and XX% due million up quarter, relative lending revenues $XXX rising second Consumer year-on-year first revenues banking last versus the balances. results to of

to XX% year-over-year to AUS quarter other $X.X Page Combined the and moving ended second fees firm-wide in $X.X management billion. at XX. rose Now firm-wide the Total trillion. quarter

Page fee due interest our billion and year. down firm-wide second earlier grow quarter Markets. revenues net the in we modestly income relative fundraising On progress $X.X interest to net of expect income was the targets towards XX, Global we to lower fee laid management We as in first out to to quarter our continue this total

up the real wealth estate loans. portfolio due first billion to total quarter management quarter growth Our billion, was $XX at primarily corporate, and $XXX end in loan residential versus

to worsening $XXX quarter up for impairments Our growth losses strong million, portfolio was in higher portfolio in quarter-over-quarter. our the minimal consumer to our fundamentals Overall, reflected lending as Provisions our the by provision and indicators million losses book. primarily $XXX modeled due across first in second due credit from wholesale quarter. quarter in remain the were economic lending

we signs and not deterioration, are mitigating monitoring the as taking consumer we side, do meaningful see the credit of On portfolio actions closely are appropriate. while

XX. Page on expenses to turn let’s Now,

XX% operating quarterly $X.X were total billion, year-over-year. expenses down Our

GreenSky XX%. activity. were approximately expenses $XXX billion. and non-compensation and in integration levels Our of to of well non-compensation run-rate higher NNIP continued compensation this increases Year-over-year quarter. acquisitions technology, quarter particularly ratio by provisions the NNIP Quarterly as contributed and business was as million related for expenses Together, and GreenSky expenses net to were investments, $X driven the

all reexamining to operating investment challenging spending are the best forward ensure Given environment, closely the and we use our of of resources. our plans

taking As actions a number to result, operating we are improve a of our efficiency.

actions will our certain reduce the going results. we though forward, and velocity time some in decision slow be take Specifically, hiring have reflected professional made to these fees to

mind, we our are detriment the We while not we about are growth our or of so strategy. expenses, being franchise disciplined to our are client doing keeping in however, that

capital equity was XX Turning standardized points an under to XX basis common shareholders, on end of our point quarter representing capital and as second we we repurchases of the including half the This ratio X the Slide the Tier to basis past our requirement million. current XX, XX.X% dividends year. approach, of million second sequentially quarter, $XXX billion $XXX over the returned at common down $X.X stock buffer of to stock common and enter

noted share. quarter, increased our Board to $X.XX by third XX% our quarterly David earlier, per in Directors As the dividend of

to Looking clients nimble ahead, we will ongoing and opportunities remain support current response environment. operating to the both in

share our returns accretive, in our price. to our conclusion, and liquidity, In business in will navigate evaluating shareholders. challenging clients will capital position, we results as strategy our in of stock and light we actively second current markets. open supporting these while reflect our serve our While up confident quarter our ability which on questions. actively for capital to our growth clients. repurchases volatile we markets, And remain continue for the to financial where We are we now deploy are help that, committed solid executing navigate delivering are base With line will they us

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

to confidence as public billion on you wasn’t I portfolio about the markets going much. the or can have us missed in what’s what what markets? see when dispositions in from I ask thanks affected Thanks out marks equity it on public And contribution the see in very was? want $X private private the happened portfolio to book such they your the to that remarks, I of in why tell the want the Hi, much. P&L the relative that if being so small confidence, pretty it but within you of what the people that apologize you by gives so context

Denis. It’s Glenn. Thanks,

for that take me you. Let

names, during look a real at So, number very, we of north a one, public comprised say some $XXX look I And to estate And of to equity they if in basis. those million investments. the average, our gains is of across an the made both on give we approximately note were and consumer comparable, of And we $XXX It’s million are of look And On composition the respect of technology made a granular assets. of approximately specifically, of on-balance top you at context at a corporate portfolio for would a we and very performance, their performance. quarter. event-driven noted example, take to markdown sheet remarks XX%. sectors. with imperfect growing what We do growing our private some albeit negative equity we are fashion. line the

of those the so performance ongoing And as reflects businesses. initial particular investment selection the as equity well it

then given down on we is Okay. obviously, seen. and because But that what follow-up, lot ECM we lot wonder I advisory are your you Thanks. Very up. you could a M&A? quick backlog a in seen much bit, one DCM appreciated. actually days noted of haven’t a these that activity pipelines have little if expand And

one at significant advisory have is What headline both share certain terms announced I our market versus other the sustained completed of you increasing can our performance, the across $X.X quite see say number, we And overall competitors. lead and which in actually would position billion. number

well that clients them. particularly on of is how an for strategic year very than global for environment could on a navigate their ago, turning The what’s help looking nevertheless, and them considering nature are needs they different client this base us be but have in the market. strategic can they robust our think to to us complexion and I our transactions trust maybe the they execute advice where

no client There to-date, engagement. they impaired, have But continue So, if or advisory do to strategic further our question in levels even of overall some confidence dialogue see deteriorate softening the could to and operating been activities. we if environment is were we see strong. were high

On the for receptivity, of levels capital a backlog. be market much of access a that’s and on underwriting our strong there to the backlog, aspects We reflection required markets like will of side, and clients again, of markets’ many it is environment our but in better that more engagement. current – client to to choose us order certain for those deliver

Thanks, Denis.

Thanks, Glenn.

Thank you.

with Autonomous. question We from next Bolu Christian will our take

Good morning, Denis. and David

posted you pretty results So, morning. strong this

guys’ XX%, you very You are market the very, me trading. cautious. sounds given continuing backdrop pretty to good ROE take and tone is in year-to-date share for just

about So timeline impact to just what more And in ROE your medium-term backdrop, thinking worried exactly specifically? maybe how you that does targets? the macro achieve are on

it. I will don’t Denis start, if anything Christian. to know will add I

are no I economic environment have on think a And conditions We environment will you crystal uncertain. control tightening impact that and is consumer the but question there The how exists, is as our conditions try ball the economic to to cautious, inflationary tone in policy because confidence is also activity uncertain. is exactly corporate that very environment to it monetary a navigate bigger don’t tell the will economy. have tighten, inflation.

I play out. think that gauge how it’s to exactly will hard

prudent us think be so to cautious. it’s And for I

is much X, we more than resilient XX from of quarter. I that Now and more benefited said, global, the X, things a the ago, in we much quarter years think we of have that business much the more saw much broader, might one you have this had context diverse,

relatively active. about looking an and operate. activity, good clients all would are ability obviously that, risk, is while Denis of about where are an a moment, certainly is Capital was is the to still feel our active. there we risk. M&A talking environment to is but where say about just at more cautious not So are everyone down. shed activity I uncertainty, it’s This environment our clients markets lot people

to I back we’re it, us to think be resources. evaluating of listen things but cautious. if And we prudent the to some continue we monitor respect said it’s and go So you appropriate for and to words, with

prepared We’re worse. might don’t way, is environment to in being too. environment gets know the better, flexible the that the worse. be we and get get going to The environment nimble case By being

a lot just I and think a of it’s So where caution sense. time prudence makes

the I business that headwinds targets, first those very respect going been set want with will meeting we environment quarter-by-quarter I other still us to a targets. etcetera, what anything headwinds targets public we we about half year on the from see some clear, trajectory unwind And not I the first would don’t and in think Ukraine targets. forward. in for exogenous the certainly and of difficult to say plan way. the faced created meeting be because we’ve of what’s in prevent this I’m there our Now those both think Russia, equity XXXX, than this as a been times the in basis going half speculate to might you But on looks events year, we markets see to the along certainly if in that have of in bigger war of in the medium-term

our targets, forward to will So committed expeditiously we remain comfortable to meet and continue move them. to and we

just any to going or the inorganically. and How tracking? given downturn? Okay, thinking about you on the I Maybe that fin-techs wanted faster, on switch strategically, here try either over is consumer is get And organically if How latest profitability to into there grow to business. are thanks. of that wondering curve out your business the opportunity there, business. thinking then I’m sort pressures a

banking I’d scratch highlight clear pretty create a the just investment, investment. I we’ve back digital leading we making a building we’ve to we’ve And It step been Sure. and question. I’d that from here. business. been and takes business guess in platform certainly have And appreciate I the that long-term consumer strategy a been

technology. I for deposit platform know, very good a Now out interesting interesting you built at We We’ve really it, with an as think built we’ve X been platform. out years. cards

loans a have platform. We

GreenSky. some told offerings, platform, at we’ve have technology than our and around XXXX. added we billion With update an product that greater in revenue invest expect of we’ve of portfolio We that also you $X

when we’re at the vast the see associated obviously on the as revenue achieve that the we this of target majority think are I with You the quarter making update, progress And can February, that that cost spoke the in products we noted, build business. we in will $X in billion said ground.

of a vast you very just reminder, basis, that building a And build. business. CECL the to significant grow credit of as so very, majority I’d relates reserves the requires year-to-date investment we And On remind comment. upfront reserve the

we journey out about returns And So the progress we just expect we’re making, continue the over we’ve business do time. to to make generate and this accretive on that Goldman to we that time. that feel Sachs to sure over we’re good to committed set

Okay, thank you.

pandemic. thing about realized, part didn’t I the credit enormous the meaningfully. that just tightened box thinking we credit I I Christian, uncertainty, When – early the very, very one was box during box and the we’re touch of on the the there focused is on credit

Denis degree economic highlighted to signals very that opening we would his the short-term, don’t in consumer. very, deterioration see the conditions, credit of carefully. different watching box we that saw remarks, And we dynamically. indications adjust very tightening credit we’re the But in significant given in our As

Thank you.

Thank you.

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

Hi, good Denis. Good morning, David. morning,

Good morning.

the So maybe appetite follow-up your growth. I to discussion, loan hoping speak as was credit for a just on could you

provision very provide you as could normal given backdrop? operating on was hoping be both about you could the well upward and but dynamic that thinking we noted through-the-cycle from a as just the some deterioration. as more of provision macro just expectation some should to math be ranges how You pressure growth I

Denis. It’s thanks. Steven,

provide extra the provisions some color just Let context. help provide around me a little maybe to

is we on to from the growth respect various macroeconomic into opposed second driven forward consumer a model side, asset ongoing our possibility the do the when employment for as to origination obviously the really outlook. the quality. recession, quarter And inflation, variables robust portion, stagflation, course macroeconomic in growth scenarios, across outlook with the quarter, we our less noted, the over we wholesale the And by first etcetera. to of work set of that’s as probability to credit deterioration GDP of So of for our levels of

a we was And our of that appropriate thought wholesale see. so provisions took that reweighted we on book to we level our scenarios, the relative outlook and we

We provide continue think We to we our our corporate to clients, appropriately in to portfolio the way. will to invest it’s along continue franchise. continue important but support of

Very helpful. And maybe just for my follow-up for David on capital.

You did cite as lower surcharge the path plans speak X%, I a you on potentially the as could was to taking manage actions of you’re were you to to migrating that X.X. GSIB to know specific I high contemplating that mitigate manage inform to GSIB buyback? be lower aggressive tone whether to from attrition And on those any of should does more GSIB to that your score revenue level we actions. heard the we surcharge ability the hoping

our appreciate process. question. I some the to me to And try give clarity thought let

the bringing a the XXXX. focused the resource level, that said if therefore, shifted very the that And obviously was extremely that that we’re were resources, assumption consistent fiscal set and loose our but context to and, that in extremely expand we stating it clients conclusion. just In environment clients they in in And what were active, deploy forward and would our active XXXX. see was of rapidly. for are not degree still has different controlling note firm. expanding us to on the same the serve street. information with a And back environment, XXXX lead our I are opportunity in growth the that half one very, saw while and my making XXXX, we us in opportunities with things to meaningfully in clients comments profit and X% the the revenue with monetary they are a seen the forward, was you that’s revenue kind we’ve not opportunity I year. policy certainly to there opportunity of of As can across and of That that first the

can last looking opportunity had remarks, based I evaluate resource trading potentially We for obviously is, But we’re return revenue his at very little or experience by allocation, But we’re being it capital evaluate about that, and up think over the with potentially we that the bit that available tougher rest will our Denis our that on that. X the and thinking time, we activity we’ve based the and opportunity we for point change to shareholder capture highlighted revenue carefully months, a some capturing, client should at certainly on going free the on in stock would where think of as this year. forward the in capital other investments. that continue return

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

morning. Hi, good

the is And One card. doing deployment, General areas obviously, Apple’s in consumer belt, other growing capital you’ve of gangbusters. the the for the business. I know got Motors into GreenSky

about you from or opportunities partnership is capabilities you’re opportunities sense sheet for a balance as get to to might thinking new wanted acquisition other how see you just I either there? So there

Yes.

So thanks, Betsy.

of of us. respect we’ve business. over technology, point, think etcetera, partnership relationships, say to Invest ground last is platform. of doing same are the So lots to the the we in started partnerships We’ve and I’d put to given done our lots interested And At with things couple bunch on people coming big that build look, with a X what I in of there years an this our are a that as said, us, cards. course the opportunities we’ve

now to GreenSky. We’re integrate working

on be these on we focused highlighted, other moment more will successfully the making which the at Certainly, partnerships we sure moment, other at we meaningful we’re and in forward. as But to be execute and included, open year. integrating forward, and to very high focused checking launching is intention going we to our later really what put things think the on executing had level. XXXX XXXX, as at a I we out get

Yes.

as Okay. a lot then us on update us give given your you’ve of has been to that sense could rate you’re Maybe well as how little And environment those do or today based would a bit separately along on or running transaction there. you how that I out. us for line And elsewhere? plan impacting the metrics banking, business as fully think building good way expected business a into on how is of ahead that higher year-end? that redeploy you to returns Thanks. the by

Denis. that it’s one. Betty, Maybe take I’ll Hey,

you forward. good As banking transaction year-to-date it’s progress feel we suggest, about business, the the and really

And We percentage continue and that revenues the importantly, XX% nearly year-to-date each the of around clients, deposits on, the reporting of end fully Operational now of billion million. continue at the metrics of we’ve quarter. north to improve $XXX that deposits are at improve deposits operational. XXX been the second insured on $XX to are so we

will incrementally a we relationships profitable inside David a operationalize on business, clients business already. focus and grow to it obviously overall So it’s that highlighted, firm the the that that balances as to to leveraging business. from benefits already It’s incrementally. growing continue And we continuing have

Thank you.

We Mayo our question Fargo. will with Mike take Wells from next

mean, in test resilient, better albeit Hi, I about expenses. last both business get a of guess then I On last more but terms the David, you talked still and and of place. I’m thinking capital, to we results annuity-like in broader, you in but you last stress have place, guys the finished Fed than terms diverse, year make, that capital trade-offs stream,

you decision guess is between other the managing I versus loss that revenues. the see don’t for of trade-off way And capital requirements expenses the So managing it lower the dynamic lower. regulatory the regulators same then And do.

at maybe profit you’re the trade-off closer you look ensuring but taking margins between at losing the that, As come of good back. risk revenues things if said a

not sure was there a question I’m there.

I what their you I stress business refer many to our for was the that’s it’s as were highlight, decrease current everyone increase comment in is what last came place, that that we SCB test actually with. our a institutions comment saw because while fair mean fair there SCB would else’s we place only meaningfully. saw firm think I we very mix, SCB wrestle I than a is that if higher exactly of the their and of would balance first

as a lap. take don’t that I victory Now

mix. big the Mike, going I still I the think, forward as much ahead are took will attributes few assets as in dense. stress to in by indicated that was this early take our making and of results tests really firm that test, next with satisfied we am forward the that continue we of tough satisfied business the We’re we change business you more the to journey less hopefully journey resilient. RWA we think, have, And the that we progress. look do on quarter over is of we’ve make sheet, taking I this step the positive other years, future I balance off of do and but one what the fee-based not continue to as steps I where light operating diversity we am think more And environment. meaningful a But in in a the show made are

some beginning and the firm the of who’s as our evolution. But the in someone that exactly performance is so And this industry right. time, for followed of think quite I you’re reflective environment

clients kind when serve those – of providing future towards. that to and true drive driving balance have investing active are to We trying constantly we’re and what in is they north our are resources of shareholder returns to the between

a So balance. yes, it’s

to be job trying as balance making we’re can, do continue good strike sure effectively. that striking think we balance as on that appropriately, a to going we to I we’re and laser-focused

capital like plan before in need second right, these B, it ready case relates going B. pencils And you’re getting deals cycle? for it’s just next previously as lower close with a stay every rebound you all before was the down I part, things going have chance it we’re but on wait will and to mean, longer? that where markets long seems and How declines. it How for that do plan not say, they like the month to do expenses, to sounds long you the stay you’re the markets alive just passes, quite it

a – resources, I approach. Well, I’d things. nimble human a nimble always allocators of We have think very flexible, couple financial we’re resources, resources. I very to of try guess We say very,

call, the going this uncertain environment, And we an be cautious. of in so is expressed we’ve think and to we’re course, earlier

degree call January worse. capital activity, respect think year Of With wouldn’t activity the at level the of beginning told in on us we not normal. of to in to soon. environment that that hand course, the capital see I XX expect to did And have XXXX we call I January markets anytime will you in the plans saw the markets our as I gets I

years, that, the have happens because have bit generally markets quarters. they don’t valuation. the But to levels, saw might things activity that when increasingly sometime commitments. that reset markets They if market one X of not minds And around few And take capital markets have level affects very it if to be I, to course years, at few history don’t look next as capital invest. get they of reset we that what mean longer average get things So that period a levels back costs. about going a into They markets They average think their and capital capital relatively kind quarters, have at activity that mind around we X surprised their take you back is little time of over the you activity the years, if years. average just the capital couple tell a think over to do talk to people would doesn’t around past that’s X takes which back the of I’d to back get in speaking, of this uncertain. some look going to you available But we’re have anytime them. quickly people activity their get And I soon. adjust, soon last as they that, mind plans.

as into surprised sort we of head we capital And if activity. XXXX, a so don’t I’d some normalization of very see, markets be

headed could and It the proceed not might and we’re in in it longer. little not we that a get it bumpy, Now my could But to worse, the is stay we’re difficult so it’s because more super opinion, but uncertain. cautiously. to going is baked cake, environment, world negative a

you. Thank

our UBS. take will Hawken next Brennan We from with question

like taking David for expenses. start my Thanks question. to and morning, I’d on Good Denis.

indicated you So more that hiring you’re slowing adjusting the sounds like the outlook. about it investments, that’s but

there the talking maybe more impact we’re has the XXXX and more year-end and or into side. about on lag, So comp even a

one, point that’s and BC&E some non-comp Thanks. if about quarter, interpretation. what to legal downward pressure non-comp? way fair on whether adjust number non-comp two, a is some maybe diligence And for we Or put best about, higher that off right think charge – jumping line? So this that then expense this of might for and the number you the curious also some the flagged the

Sure.

to And to half looking both an down ratio, the would of the significantly, question. year, And manage you have see equation. taken time, your the we the side of comp side $X.X the efficiency equation first obviously, as So components expense seen the in non-comp compensation versus at firm did the two and we side meaning first on the year. last expense some of half the half comp the at the less billion increases non-compensation we’ve same through first

overall of base you’re of of forward itself resources, something some just of period and disciplined look yes, performance efficiency the we for capital year, into our the reflect environment. will of focused the we the at being half, time utilization our as the to much indicated, during human on As hiring, employee end probably annual reinstating that suspended our of And given that the review second replacement more P&L. slow take and part right, we pandemic through most velocity the attrition, decreased of

right So expectation. think that’s the I

we’re and rate non-compensation and that some well as actions expense. to certain looking of are You non-compensation growth our anticipating the components of also reduce there taking correct expenses in slow at

of them to firm. making the – well that with are dovetail grow Some investments we’re

And look or And are as items non-compensation pace, in an impacting some growth may the but travel occupancy expenses, the inflation, example level will We of the the to where of we activities continue continue. other impact of see support obviously the actually grow that activities firm. those there will slow expense, on overall to we of the expense.

think that’s and I us towards have orientation the target, to references expense to And manage respect front. require with to just our going is work efficiency so I made our overall harder on David comments that both and which to the

But investment seen and a lot am really great. Appreciate the And debt obviously, is – Denis. up for hear have availability Okay, you second franchise lot started issuance riskier actually Thanks we curious, bank color, I about has have holding and year-to-date a just challenging. that become question slow to that question, well. environment chatter seen for to M&A we sort talked and of a around it. the how, continued your

pockets become lead there and not levered not some for of or a or some whether whether are and seeing availability, what curious lesser concern of might is also availability that any challenge that, more stress So, that’s borrowers? to the you

are with or out-of-favor good carefully. say, a price. thing it’s an think people appropriate think very, at new confuse – sectors. of reset it’s limited stressed very sometimes at to to and I But some acceptance availability the availability look do think the very I borrowers moment, would some I very, real issues I

is I sectors where now. And But retail one clearing They there an stays is at certain the people them that markets leverage price economic as and capital need to very say, if couple from price. capital. an down would raise slowing do accepting find so issue. a the the certainly new think are would environment perspective, availability I Ultimately, bigger of very, have that’s activity constrained to difficult I where And companies thing environment. moment, there the of are levels capacity meaningfully. point new

deals who liquidity companies have markets there in capital, people capital of reasonable reasonable again, think going tell think for find this clearing I ultimately, markets I levered doing so markets, there available most prices. on, is a cautiously. certainly in tougher plenty And But mindset and The is that And watch that’s at through a a you environment. we will will prices. you I in this go very of are would this when plenty resetting time

add I mean would opportunity. thing presents same just very an I that another also environment

our important is number our financing. an as extent who financing execute, transactions the example, They for have business, looking FICC relationship a in are positioned, there financed. are of with are the are to So, currently for the street, And focus to have attractive financing users. to assets that clients there way presents we franchise big given that that we on and availability less across us the have an financing clients that opportunity those of

you. Thank

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

more RIA we marketing Goldman question broader expect morning There aggressive Great. Denis. of you and you suggesting offering, that on a should the can little in are talk quarters? custody coming the whether recent has a capability. with offering some that just Good the David the and bit better guys offering the that about that A evolution press acceleration in of integrating been

So, I there? would love on thinking update to just an get your

an point, – size we an this focused be firm. opportunity of the forward It’s for X to made and at think are and in and as I area look as and that relatively obviously X an will But of we opportunity expanding. I acquisition would this course that we resources opportunity made But it we turn the for That’s the the say, we the over space. focus think in on the we why see the we acquisition it’s we an years, next that Well, something more us. scope to years are small. will interesting

another trading the follow-up at this, sense a you in history we a now and how on can with here or industry. recent as relative that to a quarter we But trading on just the levels your operating seem more broadly? deleveraging client there down prime us leg impact here, Is touched your where leverage you deleveraging but results. are second exist think lower Denis heard that interplays give of or of that to firms financing well? balances outlook any about could brokerage clients through margin trading number Okay, lot great. and It drove Thanks. And of then didn’t at

into that of ongoing am are type position that connecting current looked an transition new the through extraordinary over themselves the comments mean see Dave we a course an Sure. I some operating have for has the clients of environment. environment. We I couple back de-lever gone of looking the sure of some appreciate back it and there question. have market period. last the made to I to years,

them of a was particularly see to macro opportunity. continue the There intermediate businesses financing. them should performance had obviously are And second to in look our looking quarter very to to record I navigate on risk, for buffer to of We capital in there we We turned that opportunities which client the clients quarter with good starting minimum clients high the forward, in approaching remain environment think financing, engagement position. We we lot us FICC a why is clients levels as other help in the us help focused be deploy capital the to and may the incrementally think very opportunities. some we half. second there be

and are So, second clients we we well optimistic with we half. into up, set think the the feel I – are opportunities about going

Thank you.

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

targets, just on the Good to follow-up morning. wanted I strategic guess Hey. I David.

ROTE you don’t reason with your revenue I think struggle think investors of target to think on multiple visibility side the said just that, achieve quickly and expenses. can When when Goldman XX% we about on you why XX% by how that is lack times you any won’t the call flex I ‘XX. the So, see

to from us the can become how in on to your here journey give about much ROTE think sense year-to-date the you of that getting Just structurally do improvement reliant when about of more a continue XX%, the profitable is targets, we business the any versus think macro? macro better without

six think we stayed the where for macro first I years, returns. a on this macro good with – impact have X in year in would an months from. environment, the journey look, If comes stayed respect to in it’s a question a of we it’s next we understand if it like macro stayed the I environment, Well, question. – if the the

this and time over that by changes to would in the their world better etcetera, of than think I the Sachs, that of difficult course Goldman to because think – the adapt Although some perception and have X on of six that of I six or a people very the do don’t next the kind in really has months. side, resilient probably environment make months very months. would expect base environment have I sure would XX the been don’t there think and I more that we headwinds the would make they could broadly, next just be deliver appropriately to be expense not big the had the expect businesses a the you in we headwinds kind if do industry same way, for – shareholders. I have months been

going be think environment there to what’s different six last of couldn’t and couldn’t be different the as on impact Now that translate of months But kind it exogenous with aggressive That’s that that X-year our or expense the the our that’s or headwinds of over would issues. thing that’s not take some case. I that mean doesn’t course the create to was our but case. X-year with not business, more And forward not investments base the respect our we and case, be if a forward, in much case. base changes, just base base etcetera, worse

and where expense the And an base and pretty are first need we of deliver nimble can so I not year, to we years. the are can move that said in off we we continue with with accomplish returns. what a half far highlight of to the be over forward to we that, those with X just the resource would we confident base adjust from we the And level next that deliver allocation revenues case, that

uncertainty remain fixed volatility, is recognizing good to half you and see things very etcetera, do just actions, when And of about activity. in central of – trading, terms think strong Thank your about given – the back macros helpful. whatever on ball? as versus volatility predict the challenging for trading in it’s But That’s this for you just you to the bank all we then think just crystal that. just bad year,

never the would been volatility an expression volatility, bad like. good that I Well, has

about is adding resilient that clients, business focused have and needs. we are very and our X much which sure our therefore, their in improving we to really think over a making on business a before. not as our markets years, That’s did clients, X capability meeting re been last I were years market as that we revenues serving more why our clients, our puts financing clients, in share approach base exist improving a with to the really our our the

make be accretive financing bit environments that the shares we made balanced and forecast are and forward. forward, be volatility where a to are X-year Now and as market clients serves prepared more a all a doesn’t focus business of if quiet, client a but will I business active continue And there period, over investments capture we our more markets to can part to think the and mean intermediation I that to am as give them. is get very more that what we and and very quarter-to-quarter out clients are generates returns well. of we serve where big little that there clients look but be our looks going There businesses business. in we and go those think I the have not can’t our our will environments there

Thank you.

from question our Dan Jefferies. next take with Fannon will We

morning. Good

will to Bank We move Deutsche on with Matt O’Connor

Hi.

more of of just in that? Some details would the and your factoring I is and X% you change. got wanted have good loss on loans. specifically only XX. loan how are on on to about charge-offs Slide just reserve Obviously, seasoning environment, book, you much frame that reserves And loan macro But to growth reserves portfolio ask XX% kind a or how consumer tough

Sure.

I frame it combination think those actually a would as factors. I of

macro point seasoning sort consumer the appropriate There an that that overall seasoning. certain broad-based There than portfolio, call is to less will, to of – your be. as a together us is an if you It’s the place of is fair aged other come portfolios. that’s So, well. element environment element of

of You account bit. Wholesale, little down Consumer are those also do factors a are into take charge-offs. But make at. is up they firm-wide, flat quarter-on-quarter. and slightly. some look reference to we the Obviously, that

levels more asked a would you kind what those the you provisioning. in the the through and And not cycle? about would we anything of have on just what charge-offs I but think kind those know recession, be, consumer of seasoning about were once expect And specifically cycle earlier portfolios, as you through

cycle very has impact whether in I credit observation, very the more The think consumer presently year. our exceptional the through environment of Yes. the the point benign. are really mean where is function set The terms I health overall conditions the in of strong. been we quite so starting from a normalization consumers last is – very, is for of of

need of if that to sort from. Obviously, negatively environment you And in then persist more an would the I we towards expect move so certainly to you where of continues are think to recession, take and we starting stock if regard. increase were

Thank you.

take Gerard with our next Cassidy from will RBC. We question

Good portfolio that so are you you. morning. you at be the equity Thank couple are on some you share in go the that more years, a your portfolio? progress? or with, that got reducing David, of you less. guys still Are in earnings past you reducing focused in Can have you that with to would where in us level comfortable volatility

to continue going us XX to to I going accelerate XX coming the comfortable specific not some of months, word. progress. more we you will the answer pleased are. the like through think to – going to I make I am I but do I very make are I then is with am details. have pleased at level, with the to Sure. wrong am walk progress, course Comfortable we progress. with are over probably months. progress where a high And and Denis the would we

as why have Our was that progress don’t some lot of that I XXXX numbers you even by high-level these we a It the period meaningfully – progress. were the have made through slowed we put out of we But very value walk also assets selling through went grew fact where Denis of in have there? a things. a lot

Yes.

a So, things. couple of

our terms way in to journey. of direction are progress completely We the of travel. we are on think and – I we committed the well the remain

last will there additions the particular of were quarter. no note You the course over

exposures. We of on-balance the to equity down move continued certain sheet

a that recognized of our strong asset-by-asset are they the the that looking through equity We to we executing decision that our results way to that Fed Obviously, we have on-balance at plan portfolio. the investments also detailed nature choose do ultimate sheet something they concluded against CCAR, apply shocks suspect the our And with coming on. and SCB PPNR, had around the but

direction And and execute. is I move unchanged. our the forward, should the that’s and the accelerate to maybe affirmation have we that of overall And rate remaining continue completely if incremental us environment think right travel then even But we the for reducing anything, mindful to commitment those ability selected to so the of strategy. of disposition, exposures

you six good. recognize to And industry, the weak as can for just a first really numbers ECM conditions, Was maybe were down. driver. primarily the did not alluded deeper lower to volatility into you the guys Very little just the numbers, know everybody as Was a that we pushed there? maybe business. the we this these folks? very the you expectations for David, months being us price all see biggest it are valuations But the that and weak of guys follow-up, according the just give as sideline? market it color drivers you to for coming the pushed What Dealogic year, Obviously, them

think a combination, Yes. It’s those I Gerard, all things. of – it’s

in had in the in a public You market values market. the meaningful and decrease private

You also had real volatility.

And go mind and whole your can’t to doing mind all the it’s And takes you shareholders heading all just the price down It like with of value, of you dime preparation. turn so particular the on a people less are an down the and sometimes the a preparation, road, a you years that go road. tanker. months get is tanker the get a and of IPO, They at a and months It’s public months stops. and price. get everybody’s XX% value of sudden, XX% or And going reset. particular

And so in And volatility obviously reminds in valuations started happen March equity really, of think really, enormous picking that growth It period see again you equity nature we capital in XXXX real year again me XX%. XXXX, the here. where markets in to and terms impact. was XXXX, for ultimately markets going the XXXX a in in that shift decline where I XXXX, kind valuation. down of change had equity a But the a and then activity started a saying and late and really of of the equity in beginning The the not NASDAQ, that’s a market anemic capital big had XXXX, in period of anemic XXXX. to went in in am NASDAQ I issuance issuance up shutoff was back issuance XXXX.

journey with valuations think so And being people’s is process there are I all of reset on this. expectation the we And reset. around a of

you. Thank

Global. Seaport our from question Jim with We will Mitchell take next

just is think growing versus back flip are want I optimistic Can morning. up, – side, GSIB business. sheet to assets around like on just you I on are circle year-over-year Loans a still – managing are up. year. the looks year-over-year. client I trading pretty the last growing balance your guys It about to up of financing flat Good to or activity lower But sort comments comment X% and Hey. your

just balance think or is you slowing So, or RWA sheet can shrink specific you about something cut? there and growth areas will is this

to ability beyond, a to to is our now, Obviously, an we we we benefit it’s So, at the see of of but for target over opportunity I the the one. targets strategic holistically. to XXXX, looking in given this that questions time, execute and think plan, the a are right current GSIB. be hit X% environment A speak are to decision our lot made

And in levels we so what terms balances, that etcetera, activity, we efficiently. we can do of have various of given to ability level, client that in of terms reasonably seen our target think

GSIB we client in that deploy will But growing we to some make financial environment with clients to same that, to are should the That’s reevaluate. have But level that And addition David or other comment what our resources we leaders. and the that targeting They constrain know obviously did target deployment. plan. current business change the resource on. of of change opportunities. our significantly a We attractive have the GSIB. had a X% plan needs been that’s would that discussions time, can, at working they is of resource deployment, the

is attractive clients to that we GSIB. our X% able support activities to expectation business be a accretive continue and So, will while with targeting

you are help little with is bit Well, that? to of that you unwilling can actually a specifics or disclose you what the us are targeting,

currently X% We targeting GSIB. are a

GSIB putting We are out not are we targeting. score a particular that

you. Thank

our take question with next Dan Jefferies. We from will Fannon

Thanks. Try this again here.

momentum. funds follow-up there wanted of billion strong that Just – the quarter, is or to clearly, you in in on the commitments still $XX third-party highlighted

that As signs any about there are you change in backdrop slowing? for think this or you and of seeing behavior the outlook market is –

Dan, not it’s places allocators at at I you space. the And participants participant, seeing the a we same moment, moves that’s the and I big private into high by can that one has been big there kind alternatives people much say there there off very, business, number institutional the forward shift, capital the is that saw but institutional adequate. slowing, the If insight high-end would space. are probably at change global, Obviously, there the I around overall at a say, with of allocators allocations And respect in retail that would wealth changes change, significant the market, meaningful. but growth but seeing behavior. move have watch. capital big world, that around and moment, the not lens into institutional the may growth flow level, allocators in to macro very, significant XXXX, private that and a indications got so it’s strong a turned capital been are we we raising. down very I have for not wealth of allocations. allocation at of alternatives lot secular you of alternative worse, But has think a will the environment to that the in forward, and leading see portfolio of platforms in not as value the secular is think not the percentage that decreased, would exact the still multiproduct I When slow our is but still what capital my so something interest there global look if trend would of still significant with are trend is very have as that in from a that pace be attractive a certainly

Great. sheet investments. just some the of follow-up a balance as the and harvesting the outlook And on of then

a historically is you have to short-term, market there looking line might or assume be just calls sell of You sight these on the what outlook backdrop given I would around number less in clarity the given here.

I think right. that’s

Right line overall now. is what gave billion, quarter, sight of we than of now, right last billion, $X So, sight of the that’s environment just ended less which up what a line given happening. is $X we approximately see

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

to We any call. a just much. joining questions other so wanted Obviously, for me arise, thank the give call directly. everyone to free if feel Thanks

to speak you will soon. We

Goldman XXXX Ladies and Thank gentlemen, your second conference that for you earnings the quarter participation. concludes call. Sachs

disconnect. may You now