The Goldman Sachs Group, Inc. (GS) 17 Jan 232022 Q4 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 Fourth Quarter 2022 Earnings Conference Call. This call is being recorded today, January 17, 2023. Thank you. Ms. your begin may you conference. Halio,

call. Sachs is Good of can Relations our be Head reference conference Investor found on Relations Halio, Chief morning. fourth earnings Strategic page which earnings to This and Welcome Officer of Sachs. will Investor Carey at presentation, we Today, the quarter our Goldman may at website in and copyrighted earnings be and release information of the our or audiocast material and rebroadcast is and statements consent. our forward-looking Note Group, the reproduced duplicated, Goldman presentation. not www.gs.com. appear non-GAAP Inc. This without measures

by Chairman Coleman. joined am Executive I Denis our our Officer, and David Solomon; Officer, Chief Financial Chief and

pass me call Let to the David.

a Thank all performance. morning Carey financial us review good Thanks, with for of you and our today. everyone. joining begin I will

quarter of our deliver net aspire billion we proved said, business not earnings results near-term revenues was $X.XX. was certainly to share and earnings These Simply operating performance and Results impacted generated mix were $X.X $XX.X of outlier. are We given quarter straight several the disappointing challenging. particularly what by After quarters of double-digit and to environment. shareholders. difficult fourth an billion per challenges of returns, nine our

volatile portfolio volumes equity underwriting for the our revenue and despite headwinds. the that green many shoots at and extremely On front, of continued clients investment the quarter. equity year remained after activities, busy dropped a muted Thicken appeared our third of end saw activity levels

provision We and higher also expenses. saw loan loss

maintain and lower. in that we culture. revenues continue critical operate compensation dedication our recognize a expenses strive third world people year, invest in We rose must pay-for-performance quarterly expenses whose we talent-driven is modestly With for to the were was quarter. also That to business the compensation our to franchise. While versus we class always down, said XX% down a

including slowing July, of costs. environment measures certain reducing were hiring operating expenses, components call and we about velocity spoke our earnings we our taking the proactive last and on On first non-compensation the challenging

managing We our in have and on light in especially the focused the backdrop resources, of financial quarter. fourth continue to be incredibly worse-than-expected

reduced score Specifically, further RWA G-SIB our sheet, size optimized X% to our footprint of and our hit managed and balance down target. we reduced the our

started efforts pressures right-size the reduction to environment. also firm-wide current have for We the expense inflationary and offset firm

We made the conduct X% earlier month. a difficult decision reduction headcount to this exercise

growth we said, best. reductions paused we in opportunity during had regular extremely also set the wish individuals that given deeply had talented management-related impacted the We reductions. and XXXX. and As by strong these and They the them for performance in our a were period we are the pandemic headcount of feel individuals dedicated

taking a actions and to targets are we Additionally, shareholder of financial us reach value. create strategic help number our

businesses, strengthen core help evolution For our will our scale quarter, efficiency. and reorganization, growth an strategic which completed this further our platforms instance, us and improve of purposeful journey. is our This we important

decisions. the ambitions We narrowed also loans Marcus our key cease our to platform. new strategy offering and started some We a made on consumer process on

other considering book likely down alternatives. naturally, are will although allow the roll we We to

time we launch management future, the the At addition, intend In we our have offer wealth clients. to right in postponed product. our checking checking of to the

is GreenSky. card strengthen and deposit priority partnerships to our our now, For franchise,

us and allow Our narrowed forward expenses. approach will to our investment spend rationalize reduce

we and next path Investor at developing a focused are month. very toward will our and detail provide on Day more profitability We platform solutions

hold see us continued committed for accountable. from reporting, our can you to for providing we transparency you As us segment – are new to

clear that fundamentals would signs inflation, we never aren’t on moment incredibly of expected, sheets operating a company spend some distress, environment. the over for but The widespread to remains like outlook we many are we were and the want broader There but high There in Ukraine. dynamic. the last been balance it’s year XXXX thought see ongoing the like backdrop relatively headwinds land uncertain. I war healthy, has

Bank the to of labor with impact available lowering the rate started an every market economy. remains In estimated American. And the Central job also remarkably increases growth have but have U.S., openings the an trajectory they on are tight unemployed inflation, X.X for

term Our about business thinking near-term. times they focusing to started backdrop. opportunities see for on firms preparing lot like Boards would cautious, a for and plans. within particularly CEOs are are tell more this before navigate have to how stability clients rethinking and are committing to the complex control. me tougher their factors longer Many They

a have more am challenged back, made we of returns and in performance, shareholders over fourth XXXX. in proud significant Day evolution a with XXXX. XX where progress years. ongoing markets for strategic double-digit Investor we drove disruption quarter significant macro and Taking tightening in fixed our I monetary the uncertainty since the in generated income for step We a year equity both rapid first falling market Despite delivered time

and by net reduced alternative XX%. by income year-over-year management grew fees sheet grew other We interest on-balance and billion. We by investments our XX% $X

the and we us roughly ahead for. by lot our also dividends a focused $X.X work This we as repurchases to believe value almost as growth Investor closest of book have XX%, said, competitor. on grew since our twice Day next X%. and billion we of and remain capital brings play our share of We form returned we much to That our in the first book value

activities go business; growing we businesses: out forward, in number global management fees to solutions key priorities scaling number share business; are profitability. management and number executing have asset for three, and markets platform maximizing three our we deliver and on our the wealth two, As laid growing and one, financing banking we wallet

and client-oriented navigating where we record cycle. wide range of the We to our environments of will in proven have operating of a are we a regardless track long-term continue execute strategy

you robust focus path of levels We the people clients’ and on needs about the a to optimistic serve capital continue with we Investor have Sachs a from place all this around range at our the XX. strength forward Goldman confident of and forward. clear February to the of about with to our will operating we more broad for world that in Day I of and speaking deliver excellence We are position look on shareholders. with future remain

now turn to it will I over Denis.

Thank you, morning. Good David.

the In billion Page start generated revenues net per XXXX, X we share $XX.X Let’s of earnings presentation. of of and net on $XX.X of billion, $XX.XX. earnings

earnings have today. for As implemented we David presentation highlighted, basis organizational form the which our changes, our

than performance last business Banking Markets performance. Turning and our Page decline $XX.X last generated over XX% market have billion Global to the Banking including revenues performance in exceptional share higher ballast the more X. served investment by of business, firm-wide a as year, we starting Global by X steep were for Markets FICC results offset banking revenues of down has fees a versus record for and strong generated the year. years, The gains on

equity fees volumes third year-over-year higher in amid rising volumes. In driven $X.X revenues, significant billion, however, in history both uncertainty. our as the XX% issuance quarter, a fourth banking debt remain highest muted the deal were completed fell by decline on and underwriting investment XX% continued market Advisory quarter-over-quarter

and completed league of and For have ranked XXXX, in years equity-related table number equity underwriting. last for the M&A position we as we maintained XX we XX second in our one

year. number underwriting, three also from We last second in ranked up high-yield debt

transactional activity, clients pushing and are out quarter-on-quarter of financial on particularly focused Our said, solid, of conditions, remain being lower backlog on timing the activity. in levels That stability fell but advisory.

both will in expect before to some need particularly start we more positive investment which While the strong financing States Europe. certainty we signs broadly, a activity, investors year grade the are and reopen more had markets, markets of seeing in have United

In year-on-year. volatility activity FICC were conditions. by and up in improved rate we $X.X elevated strength net commodities client bank central revenues amid market-making the billion XX% and of intermediation, engagement, catalyzed quarter, rates levels and saw in increased

$XXX $X.X down we derivatives, Equities In of The decline year-on-year. levels strategic billion to as XX% lower risk clients billion Across the engagement grow despite prime Equities, revenues Financing client throughout took financing with by client driven particularly the FICC our lending a FICC intermediation throughout XXXX, saw in levels by off increases in was balances FICC financing, strong balances. activities. revenues were up year Full were net in relatively the quarter, revenues activity, revenues after year-over-year driven higher year. consistent XX%. of decline resilient financing secured priority of X% $XX.X in in rose and in million revenues were quarter.

Page Management Asset on & X. Wealth to Moving

strong XXXX, debt revenues and billion a XX% $XX.X as of offset investments private billion revenues. a in and equity of down banking For $X increase steep were other year-over-year and revenues from fees additional decline management and lending an in

lending billion due were and $XXX putting quarter deposit us and deposit target and fees XXXX. to $X.X million, Fourth hit of private XX% banking lending quarter net fees higher XX% higher and our spreads revenues on track year-over-year well Full up a to other Fourth balances. $X.X $XX up billion were management reached management billion other in record year year-over-year. and

produced of net to $XXX of and to CIEs, $XXX were losses investments revenues portfolio. by billion on offset million Debt million. including $XXX roughly million, million of of Equity revenues our million, gains investments net in billion driven related $XXX $XXX portfolio revenues equity investments $XX interest public partially private income gains and $X operating by $XXX net million in related our

fixed well assets to inflows firm-wide trillion, on as income $X.X ended record as driven under the by appreciation Total liquidity a net Moving products. at and Page supervision across quarter X. market strong

and where We the the other third-party X will review end in focused $XX billion new $XXX fees billion for a billion franchise. totaled year. on the fourth to was quarter, for and Page year. at $XX Let’s totaled quarter remain now XXXX. reach in in the driving for management track quarter $XXX $X presentation I for alternatives turn billion the billion fundraising our on the AUS Alternative $X.X to and our Gross page our million target of

since stands fundraising billion. Third-party at Day Investor $XXX

$X fourth more in committed challenging left we portfolio, which business balance the shows density $XX on-balance sheet table Despite billion The quarter. reduced third-party remain reduce to alternative sheet on-balance billion. our We totaled bottom migrate was our to by funds. the of XXXX, which alternatives and our $X investments environment, the strategy sheet on billion in investment to

I built of reflect on of driven losses Full revenues portfolio. Full by Page were $X.X were we loan of year billion billion turn billion more versus the will across XXXX. $X Platform $X.X year as to X. Solutions to reserves growth provisions billion, than double $X.X

We also over This card continue acquisitions. in costs integration-related $XXX transaction we these run $X.X GreenSky the of by to and incurred driven million as and build GM billion out and businesses. included expenses portfolio

at expect over costs subsequent these lower and years. a results, though level to impact We XXXX decline also materially

reach further details with segment you Investor to As number profitability said, next providing and we one for at our David month. this is priority look our forward to Day

was quarter and fourth X, net the balances. X% firm-wide to up of $X.X Page billion the higher On income increased due rates quarter relative interest loan to in third

loan Our modestly total quarter, $XXX lending portfolio the credit and at growth higher was versus end cards. in billion, quarter collateralized reflecting third

$XXX provision for credit was Our million. losses

our wholesale lending provisions retail our For impairments driven continued portfolio, In portfolio, resilient. growth, portfolio credit our of were by growth. The charge-offs quality to were overall baseline and portfolio net of worsening provisions driven scenario. remains our portfolio relation wholesale and a by

line We in our XXXX the are our are portfolio. and nature early seeing pressure given in further We signs vintage of expectations. anticipate deterioration of that credit with

higher were transaction-based $X.X Let’s the was XX% technology. turn despite partially Compensation increase X%. were costs and to expenses. year acquisitions, billion. in to investments by Page were in headcount down expenses XX. operating XX% continued related for billion, expenses primarily offset a Total on The fell increase operating and expenses $XX.X non-compensation expenses Quarterly

higher addition, In client-driven pandemic. the were development levels lower following market costs during

engaged targeted headcount technology we and communications discussed, exercise. reductions and costs previously are fees well across As advertising spend, in includes the recent expense as efforts. This actively as professional reduction mitigation

results that will ratio as highly operating the right these committed become remain and efficiency target our fully firm. are impact more expect reflected to the our focused place of on the We time, in efficiency actions XX% run over to

Slide Turning XX. to on capital

common This sequentially. basis we the Tier requirement of end the was new XXXX we of the shareholders, In quarter a capital enabling our a $XXX at equity stock us capital clients point fourth $X.X including million. common of started position, fourth up to excess under common of X billion capital XX Based approach, basis XX.X% standardized on at $X.X represents the end and stock and shareholders. repurchases our to levels dividends points strong returned billion with XXX return quarter, the the capital support our to of to buffer Our XX.X%. ratio quarter,

will As significantly it funding and dynamic for remain our to though business based we needs market current run issuance below relates levels, to plan opportunities. we XXXX XXXX to with intend on expectations, respect

remain for of strengthen despite in shareholders, capital conclusion, double-digit made returned we progress our to billion strategic material upcoming February. diversify better shareholders for and delivered our We and returns our In value and we the seeing many our and strategic initiatives firm. operating to on on you at $X.X serve forward focused and look XXXX, environment on priorities Investor executing challenging Day in of clients creating the

will we open for questions. that, now With the up line

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

Hi, thanks very much.

So better it’s given actions to your closer feels but is bit what XXXX Can but investment capital you’ve taken have the we’ve lot targets I getting year? difficult already get the same RWA know the all there banking actions like and is little you gap? very am it’s because need of to it to closing have if kind we at backdrop this that been expense Thanks. I a get return banking, atmosphere this to better you in start or be the do a it’s in lingering. taken, in

it a So, a Obviously, $X last I disruption it’s talk of We we capital direction. just asset with of an a balance quarter, significant have focused prices is sheet, about real capital the over year want X strategy better sheet in our do normal. thanks, fourth and continues years and the have the segment. density you would the when in $XX we that intend normalized that’s made even have quarter, environment but our been I think allocated at this that management still reduce we question. think the if on there One by not in the And I to balance larger would sure help Glenn have asset asset billion profitable, sheet balance to the in fourth businesses environment. certainly markets last management. asset are This is than in like expectation we that highly given We way. have. we some And move don’t past same make forward. progress that it to you of to very reduced certainly billion years, is thing on that improved people are appreciate our look zero, and surprising targets exactly earned part But and to don’t management. the has that X to our over I

sheet peer And so a with stimulus a normalization sensitive some we highlight combination of markets that about by and sheet, and I year, the way think of we’re massive I’d in management of big bunch to more respect because ROE of capital just activities reversed, that and a kind XXX the would have environment average balance balance a impact. more basis asset certainly outperformance the last outperformed of to the that. given all points balanced

at point the the in have our in reason drive returning position deploy non-compensation why forward capital some that out, with and further. terms you taking as of build business incremental within the we in opportunities respect with addition year, on to to mix action I headcount Glenn, the beginning shareholders. a in attractive think pretty our we’re the either of business capital our footprint I flexible how to we’re mean is expenses even of of support we that and/or can things is as might add, I And to efficiency the

revenue music And is staying there XX,XXX, a base. it’s being some up to deemphasized. Consumer banking good, transaction I unfortunately then Okay. appreciate that. to maybe is but maybe small investors

strategy? that if pieces I where more durable guess goal either that share is think to or you my from your is the going a do Where deemphasized of question build from past being comes is, some and firm forward goal. So I small are Thanks. the

management client-oriented sheet Well, business. business thing big intensive and a I the big balance of from fee-based asset the in always a part is a think, shift been it to Glenn, it’s that,

our still good basis XXXX on industry. Our broadly management across the when asset across a business relative you organic was growth look in

in asset business. management our We fees the management continue to grow

grow We’re our continuing business. to wealth

Our wealth the nicely grew business XXXX. course of overall during

we have these which in And our balance development. and We to and stage profitably, you’ve financing should asset month in getting and good out we this grow capital which intensity, not sheet years but so think for growth and change, resilient, a with to operate and we’re I environment some Markets seen balance quick and sure businesses will and Day. sheet is growth mix of was core with in the the laid of business, platforms markets less the X strategy Those making that it’s next that continued course, the Banking What can Investor Global that our more believe impact outlier we make amplify things in investments continue massive other that’s then from business at asset business ago, swing had, management, and do. inconsistent they things. different are scale, intense again an are a heavy prices at we the we believe the they in wealth drag in of

you. Thank

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

do you. I management asset does morning achievable terms where be in as that consumers world, business year? make time Good pushed the work less in last out had within guess the sheet to ROTE get target a deemphasized? thank that, you put dense or David, frame the being sticking we balance that that given that of the you you think to still X-year Is needs out out laid and, consumption. maybe, How about just and done

massive economic of asset that we the out. depends will it If it normalizes environment the than in the firm. on swing prices with picture that continues, push overall simply candidly, think, I An environment.

that doing work to the expense side we’ve different again, back on not very think But gotten to amplify don’t I’m XXXX on we’re that years look guess saw was I’d I it normal. how the of that at XX in you a out. on, wasn’t. play and go what And we certainly, focused we picture. will will show if In addition history, very, going

wealth M&A being follow-up inorganic the Okay. price asset Or in going time terms of as about businesses? of the think organic? is create management, growth most expectation I those a that asset we this just some be in management, significant to dislocations. guess opportunities growth is when Does And for in that

to the I opportunities our executing focused invest extremely and in made XXXX, an to here, on But decisions asset we’re think We acquisition NNIP. execution. think last that. in the we’re wealth in moment, forward management made We the accelerate the and want move there integrate this inorganic management. do we want on at still from be could I on to year. with the We year, journey moving future, asset certainly, in that focused and forward to platform

year, think focused So be I this will we on execution.

you. Thank it. Got

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

good morning. Hey,

morning. Good

planned to in just came could speak loan So Denis, with related Admittedly, of expect than take actions just growth higher we of And the was going deterioration loss that wanted growth provision off start normalized question anticipated. the to, I how provision outlook. and on was given provision And much I David you a it of level in how and we macro? hoping had expectation about loan going math that a you’re like the business, think for forward? should to we versus should the some

Good that me help morning, the fourth some So with quarter. as in to particularly for provisions, relates it color thank let you

magnitude, the of about our that to and charge-offs was of balance attributable about Net the build XX%. to component XX%, growth attributable So order scenario.

of our course and you the the lending some began the in can platform, to of see of do the the build what we originations the fourth that of provisions quarter, we on-balance over course think is GreenSky. in over this I continue expect XXXX sheet point-of-sale

reserve it obviously And build. upfront brings so that with an

balance that following of year year. past this and something over the through will initiated that’s continue So the

just maybe follow-up for And it. Got capital. a on

speak Basel to question, discussion how we future don’t III can has generate. was proposal tied your end scenario game. you certainly, for for but to recognize it hoping to planning could it returns a Basel I you have IV, relates significant As yet, the I implications Glenn’s

you level take businesses? What the You’re healthy running pain? impacting with mitigate moment. maybe to to see it wanted just But planned at understand how various of of you a some your actions cushion the can

question Sure. everybody’s mind. on Fair

you a steps details. we sure we get the building But of of taken to regulatory responding to We don’t make actual be that quickly respond As capabilities to do as in we when long-standing record rule modeling we track note, a have lot give do to will and position to in terms We’ve out our thought. have of of guidance. yet changes it that. number an a a

over across see to capital can course footprint, build You resources decisions of the able environment that and number financial very, some given of our maneuver the we there. were quickly them of a and view the RWA quarter to fourth our our very change strategic

confident that standing by on rule, able but for we’re get it, we detail be manage will accordingly. So we the when to more

Thanks great. questions. taking for That’s my

Thank you.

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

Hi, good morning.

morning, Betsy. Good

morning. Good

that to acceleration are the to lean pullback other and feed either you ability this and lean or in capital we back, should Two you the that business, on the keeping room originating to more questions. pieces into ISG GreenSky, One the there. pull Does heard on partner business? to or growth market you expect you’re is lines card going going the increase like those give markets I follow-up see consumer business

Sure. Betsy, that. it’s Denis. I’ll start with

should free indicated, bunch financial we resources. lending. pursue furthermore, the going we we’re to cease portfolio then that under That up And for expect roll other of actually to a may originations off as alternatives. in or So Marcus

the we’ve business remains business achieving there. lending and the asset the and That private segment and is scale. a That growth where within wealth priority line. within banking more continued strategic and management deposit the resident firm, overall more very We’re experienced is for good

an remain will that ongoing focus. So

transaction to narrow of platform cards business, and And we’re some GreenSky. our markets three the continue we spend. resourcing and drive just businesses: is our segment on of our businesses to the investment banking, And reduced lending, Solutions point-of-sale have profitability. focus the within we Platform allocated really I ambitions focus now business, those the lending narrowing the across down will to to think different to and our once

just in question embedded it’s this a the separate that? obviously, I on action expenses out you not about there to Then quarter. know should think Thanks. should headcount that Is this hit how of we in could Or the Okay. ongoing? speak quarter severance the does had strip because, reduction. that XQ? Maybe you we

Sure. XXXX, reductions associated will communicated Thanks, Betsy. expense the expenses. severance Because those we in any with XXXX associated be reductions

Okay, thanks.

you. Thank

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

I your think Hi. I You that announced Dave, ago. one. a have right? few birthday years today, it’s

be thank I call you. that. on It Thank happier and with to my birthday, be you. is you But for this couldn’t

it’s the question since negative your first. Well, birthday, do positive you or want the question

that question happy question. have, Mike. Any any You to I’m want take you –

that. You know

quarter. a take positive wasn’t to We’re and great happy both questions mean I tough. it

So I questions the all don’t expect easy. to be

Well, concerning more I of is us Investor it hope terms Day. the a give And comment, the I we mean in more get data. at will you reorg, mean, I just

only three the Here sectors, four and the gave years prior have us X prior new much without quarters you detail. we and

narrow on focus is, ahead. differently, actually more firm differently you consumer? the the you hope more I question present the but other give firm will So But be than the us run

Yes.

to I And so that. – comments. appreciate two And

Mike, the transparency just on I focused last X.X Goldman team, management years super we and focused that. First, has over the think comment, this increasing on information remain the transparency of and been Sachs, on

we really you to right But that have to more will we’re and out around investors creating that, transparency on Carey what focused our certain feedback. we’re and kind will like doing. of and If reach see, feedback we things take etcetera, and giving on you’d you, welcome more the

during evolution been move I’d started run the years at that same way firm candidly something and we has difference firm. organized to what been a of way that this, this And but presented the the ago, say, the that’s the is a on it now tenure Second, we has Goldman and been a number than externally Sachs journey is and the internally. my

continue business, get the ROE leader. minds of markets highlight at business And banking the of in client to experience long terms business combined relative on now it to in organization That of of helps. our returns think performance markets, are business, this now core Investor investors. we Investor broad the about markets in continue big stay of of and back to competitors, In It’s the grow more orientation we XXXX, can the question when businesses returns of we get banking above terms since we also that those driving think, outperforms our the on businesses Day, XX%. across was synergies and we our feel and a and cooperate forgotten. and client great those look I believed these in that businesses franchise is could that we we’ve terms a as It and that we Day. we outperforms of But and business. performance together our been this that share out there market its nobody really its of our did the our laser-focused that of

there think to on also continues opportunity We be and there, our very focused grow financing very, we’re to business that.

the reduce sheet years together said more serve change of focus wealth as that. performance we we’ve things I strategically I business. on that of The last businesses think, move clients along, along? journey. And volatility, we ability intensity particularly management, ago, narrowing in this to a on to further an would and that’s we business, years, we’ve management fees in X and continue our a Yes. out few in and franchise context number fourth year and the be of of that. our Would – have there at like continue focus was And balance drive over really we’re a have on integrated bring asset can transparency worked grow a into hard so But In change. to and less it laid If something we is to the certain it the in been quarter. consumer of further

continue the can meaningful We business We for of in with deposit other to the stage it Sachs, are are our contribution development will about benefits Apple very in is dividends than the firm. businesses. think be Goldman but a the They good makes. feel that to there provide a GreenSky the think good our scale time. platform think overall different we over We the partnership small accretive, are that but and of for platforms firm

forward we more around we think run will we will move focus narrow as profitability. making that that, progress in way can drive but We and communicate to that a continue we’re

So that’s you if response. there a response. else something but that’s I to high-level don’t drill a high-level is me into, know want

the is it’s look, specific. said quarter. mean, follow-up disappointing you a more Yes, I

Your well your much you variable other and are go to revenues them below efficiency returns want so ratios the direction. be, variable not where and costs,

I reduction So money. you okay, some benefits consumer I less money last get you you I some were back mean, the quarter, of you allow detail appreciate expense on as investors on lose should losing save asked said side, would maybe you headcount might money. to The scaling you think of you’re the what so

those to and for so from the well can think above to own lines benefits your XXXX? consumer cost you’ve capital So target expenses in about you the of moves along And kind and firm’s buyback that regulatory headcount and reductions? the now what buyback ballpark the moved

me Mike, Sure, let take that.

couple a components. unpacking So

$XXX this that. XXXX rate group the exercised The the run employees expense left associated expect So that approximately associated north X,XXX was firm. year, with and of reduction earlier we we approximately in million with benefit million, $XXX headcount a

Beyond series initiatives. non-compensation of a that, we expense have

to to business more drive There focus flexibility our consumer chosen expand and you deployment, capital narrowing non-compensation efficient focus advantage the is for have as of. which have important. are narrow. of a now guardrails intend offering spend. that. in levels finally, to in of The which out leaders setting we of we of the identify, And we with take then We’re to The respect capabilities is number could more ways

Thank you.

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

restructuring those questions for in given elevated of wanted honest not just I follow-up expenses severance just Mike. there surprised questions. Good were. for hear really some to And morning. the were that to quarter, the be my Thanks fourth kind and taking charges how of just on

for you of understand little markets can inflexibility, down I of year. but revenues XXXX And guess, XX% that, was a was it the bit year. So I a competitive, course, color remarkable the – the are in positioning of provide full on comp

even Some or repeat. segregated to and it expected be identified therefore, shouldn’t as special of

for I – the it, Are on you nobody still the of efficiency, to on the fully of for there? enough set beginning challenging in results have – results discipline is comp? Goldman here the point but today buying sort the So a results, the focus doing entry the XXXX but get was reiterated up year. seem You

So Brennan, a couple of questions.

respect severance the XXXX, our for to take in to that’s communication accounting expense those reasons to As rules the of with timing employees.

the that’s going frame booked. in be So to time what which explains the expenses

couple I $X.X of are XX% As components look point employee meaningful operation of fourth impacted would very it and expense, you expense, And out over have flexibility people you – XX%. overall I behalf higher the down really our a if less that’s comp less variable And overall We money our inflation when on billion relates are the it’s large and and that that expense to a headcount we and in compensation the base, benefit One, relatively of a at of of were delivery our clients. things. important fewer benefit have to had number And that additionally. we earn firm quarter, that we the clients maintaining of we’re relatively number. can so we opportunity are we that. brighter reduce have with to grown we performance. by earning employees sets for make sure down compensation by respect guess the position and And that can and market to to balance. a performance substantially in the them able strike the variable in we But capture compensation make and ultimately, our for beyond. there and sure the are generate XXXX while right expense to employees that to in line remains it’s want to positioned the revenue, clients we really Certainly, have the The deliver excellent between forward shareholders depend talent face deliver were robust, clients. had on for We in of we taking and and people. franchise balance on expense

for the confirm exiting being a want Alright. thinking through though the of I be a we Marcus has up might even breakeven but business? appreciate to whatnot, expectation some because that seems here down. disclosures does longer Okay. This just it the I though J-curve consideration consumer any it at that end not and Thanks as the Denis. even but time been for longer that. spend J-curve expected. have color, don’t one previous moved, Should Is it. I seem yesterday looking cross than and not from ex-provision a as about lot tone

just chart the remain the part pivot, should consideration? that about So, we or given forget still that does of

of I out. couple would things a point So,

expenses. this have would a morning, Platform on Solutions reduced quarter-over-quarter the earnings had in people As basis segment release seen operating actually the

really these aggregate, in So, to expect activities. some provisions have as of expense scale. and you observe, and we scale at at continue discussed will we drive as benefit we remain those a we focused on our build to we of the But to drive lot continuing also platforms of

various on segment, to be driving focus And forward during until we trying will towards and And period this point help there profitability that map so to across out the singularly within profitability. but time look our lose businesses to progression of understand ultimate we do a remains that continue reach segment Day. of money people at which that Investor we of

Devin JMP Ryan next with take our And Securities. from you. will Thank question we

David Great. birthday, Denis and David. happy and Good morning

you. Thank

for other guess million first banking year-over-year. transaction here is transaction one and on platforms. I zero just $XXX to up XXXX in banking in XX% in

a have great So, couple from just you had growth guys scratch but really of obviously immaterial. still ago, years

little get multi-billion business. know just you that talk doing? like going progress it’s business for about think Europe Can that the roadmap I just just in about feel part business. So, of kind you part is what of bit how I a to launched dollar already want this of doing of in there, to the really execution kind to trying the a just

Thanks for question. that Sure.

it’s are business, that pleased banking transaction activities has and scale the a it. we business we the particular benefits with progress very Now, as of on

and up We have running. our platform tech

forward. unanimously We larger have continue to expansion potential be a to you very part at And And clients the of is are our business mentioned, deposit continued to from give attractive We on its that drive say, inception customer penetrate, our grow that They the platform. international as that we continues. we drive point this taken in to balances, scale. a it business, lot you to our for the feedback count, us is continuing on focused think in very there and time platform to of. continue as differentiated further

opened country. serve the see now to of world. very, have continue fifth our this global for are true a this effect the There in like We business increasing we We business. to opportunities clients good across benefits And with have very capabilities reach. to network

opportunity. A Thanks. Great. financing follow-up Okay. here on the market’s just

kind Has to drive the kind year there it step to at do more all talked could Goldman. start blocking brokerage maybe part bit lot about a of with near-term, further? obviously today the quarter? tackling, and need being then that’s for grow of you story What of or most another a balances kind So, and to through same been of specific through you changed better point could of are this Is to just fourth things the financing a down function prime declining there? of nice you And than already just that that just appetite to risk the do quarter.

I couple would make. A comments Yes. of

us. financing, in client the The right very market financing continue FICC we the shares we with we made that with have capacity fuel the activities And set given think in now, business. and beginning backdrop I opportunity of the the availability clients franchise good given to relates our the world the and of as a to sit to that So, progress at our position it in to and come the have have year, us. overall FICC we financing front of incremental capital the

financial particularly in severely, to RWA environment resource really around of the it level. it we moved also brokerage as our G-SIB with end know, On year, fourth markets of reduce balances. That equation, But obviously, asset quarter. growth, are quite the equity you drives in side was brought not very footprint, that the were significant on certainly hard which the the the reductions. And particularly our working we prime pushing

to New have page is X% equity G-SIB a drive we turn the achieved that and given lots on we less for as financing us of now continue we constraints opportunity to Year, the think our I have there target. activities,

you. Okay. Thank

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

that you the sense what to some us provide have maybe how are you wanted expand in hoping at Good And funds, the and Thanks. from and seeing of one for new previous I upon going evergreen morning. has much you funds the the you buckets X. I closings? give of could size different are And to on a fundraising business? was are momentum raises as second these fund third the Slide been increase through or periodic the and classes, look meaning funds typically that subsequent context seen asset or open for

Sure.

and always management have contributors in been this business And So, active of very businesses. have the portfolio our of we world. the And have position broad one we number a a mature some funds. investing extremely to asset the of for as largest number it’s decades, different the five funds, very, across portfolio in we firm of

our of Our business, mezzanine some investing loan GS our Capital equity funds. funds, Partners,

we raise support in and offering mature new deploying franchises for up frequently we see new that pockets to multiple and that are what successfully continue we And demand. have strategies and back in continued the channel. client that to businesses monies then our to expand open are going sort diversify of have to and response We

investors, So, global, different set, which a their platform which we investing very have types terms some deep offerings that as track we about has are overall of newer. many of many of mature record very, and in are for opportunity broad the of and think

and FICC you of the of on broader trading up the question the through market kind earlier of rest of then see just Okay. It the around you today backdrop. but maybe kind see talk sounds are backdrop, maybe you intermediation the on the into the optimization maybe can following RWAs, about year? backdrop side, like you opportunities the where and share And where

Sure.

businesses, focus to we share and sales share. of data the market that to So, quarter lags, third through continued but grow continue Market in on market year, shows it those trading. we share last

So, that of the very firm. core remains very, a focus

we can incremental continue make we and make progress. We progress, think to

were interest enabled things we advance normalization suggest early be we new indications to debt equity given have franchise. to perform if we with products of if business on One have had the lot the particular Certainly, after that back investment-grade what as markets a across energy there business underwriting tailwind made of up, come some as variety different is happened number and position a the activities. issue online side of activities the able performance capture, a should the rate attractive The last investment markets intermediation that credit, are for of have that of open underwriting with given they client environments. offerings in we of to the the which new things of year, is investors in place that around takes us activity about and lines, softer a rate the equity in world, and business. to the mortgages Meanwhile, business, the commodities and us that

were will activity become of a more could of from So, activities I areas where XXXX. continuation in in possible XXXX. it’s some exactly relevant ‘XX softer it active certain quite be were and can’t predict that come those that rotate XXXX. Certainly, that But may in

Thank you.

from with Bank. Matt O’Connor We will next our question Deutsche take

morning. Good

think this characterize, years. of couple what you you next some bolt-on, transformational think interest the but like of had continued time. piece-mailed and just asset more necessarily in but out, wealth over would deals, deals. have I mean open-minded we to-date, are kind you maybe not sounds more guess mentioned management people have in characterized, I – I towards just I deal It as You year, a most

on just But transformational organic expansion different road. You the areas. to have done results and in something some down maybe thoughts mixed more openness

think have asked I appreciate the I we this question. been question.

bunch a it asked over time. been have We

in management, asset like businesses accelerate there significant the think wealth things I platform. are that could meaningfully and certain

the have manager Sachs. largest we Goldman in the businesses inside up world that stood all active have fifth the asset We now

that bar that scale And more And certainly, that necessarily do say barter lot a the my is to the things increase significant significant. to has us M&A are are for there last But prices of career, environment different would high. been issues, those maybe in the issues, but are do not banker we high. somebody X that over there eye-popping, be we a bar real. so the integration the is opportunities certainly things it. will to think where cultural could are out always that to to part well, do that’s opportunities have been in open I that, that there extraordinarily things as are strengthen years, normalize. also the There And know scale. for do Sachs, the I to we can of opportunities be very, Goldman a wealth an Certainly, very

forward as But our for our of we open. we performance plate on years is we moment, are can always in returns, we good we and say we think good what book the plate. us, good of focus on have shareholders with front the would at few drive executing I the growth, on So, opportunities in have coming our value look

Thank clear. very was much. you That Okay.

Thank you.

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

us And you us today in of markets? Thank maximizing morning. number in & to share management with both growing growing are In share, you wallet your that how you and banking couple share, markets and – with wallet grow years? opening of and in over two, maximizing investment David, business, share gave Management pursuing then in next the can global fees wallet platform. you banking Asset the the are three priorities where the the your financing scaling the comments, Wealth Good you. activities the in your and

Yes.

strong. I a A look quarter’s in can will see couple So, quite And point businesses. take this even we to can you that these things the performance. in you is – at our performance of performance

performance. You revenue relative can our at look M&A

our ago, FICC structural You them market years has three and everyone really we And to what’s there had are performance relatives we to at only clients was X equities I We that set and a we our the look meaningfully heard ago, about talk good. really always We that call in XXX them. our businesses. this the this years markets performance contribute ethos had and us set investment can And even relative thought pretty big brought our say thought business. markets know of tough we never in X how into look – We with business. about change. client a are shares been out quarter, out about business. XX top our banking And equities on in FICC

we or growth view does there That been toward bit has one when footprint footprint number top that footprint that number but look we position. looking We to, the little are from and a with, a And because that on you the those wallet number wanted zero we number focusing serve we In and but three, more well activity, be are share that have take banking, has growth. tilt grows been top ticking now a will share think capital wallet aren’t we XXX. two is we really top and markets revenue three come okay, really of one can with clients XX by of and room two can on equities drive what that there to now focus shifted why X-year candidly X-year has expensive if forward. the us markets really at think capital

forward. focus investment is will we strong move it. continuing so a in I attention on are powerful investing strong, execute but on The laser-focused strengthening still shares firm business we banking on is of to this And we it are as see to and there things any is don’t some again, that and strong. of as in. as more core wallet there Those of is think we lot the business, very that are continue to markets So, opportunity paid and the we

positioning on going as went apologize. you When But the in then consumer follow-up the I have have a And good. what may shift you obviously, how are Very very forward. on missed when back you that. go I and business, were went been strategy this, has years so been wrong? you to businesses back know in when this clear, you longer move these so, around started to I X deposits you hoping guys Marcus what to into out, look do wrong? turned But on than how or ago it what

a of are go that things bunch some well. right, did were things Well, I and not there think went there that

loan the deposit think business, the we too some obviously think the do others. simple think hard about it’s question, that execute we when on phrase, back that in much years we executed it’s environment well to came are the course, X started and things built we we I thing I that is fair But some we a Gerard, in And in, to too go to broader ago. We that platform. business, conclusion tried would were I I much of on we that strategy quickly. didn’t And and a there the talked changes.

changed the change. from of is the these ability pace things One businesses it’s curve in like CECL scaling at is that changes the CECL big lending on this scratch. affect do a different big growing the of to this scale and

changed of we think XXXX became I much, regulatory too last also our in that. were it has environment So, affecting over have of was early couple course But we that to to had The us the the adjust years. execution. clear to doing

haven’t the to we think we I probably, all we that execute places, the wanted. way have some talent have in had needed

we that down that, the to accretive core We actually businesses be narrowing think going that by are but to we are firm. are making the on on three things that adjustments focus good can

we think have create now we a it got more a forward. place cogent in I can path where

we doing. we we is would things at pivot. what – takeaway that’s see things, we I and so when the And I investors look like are understand to And

not are things. to married We

are to change. We willing

time, some. I vast what accomplished didn’t go know to do. we have But things I have back laid not laid execute Day, XXXX and when there mean we majority have you period That we our think work more the of we Investor out. what, during executed on of out look and on doesn’t at is that perfectly I to

And at So, those we and I you look nimbleness amplify. make of the of to Goldman taken the ethos want have that a of hard adjustments. that’s kind Sachs

willing We are to always changes. make

XX% not going to our Investor And be always and We perfectly, has focused gone are again, book growth even Day, though point since I out. map our shareholders. I on value that would everything to

value book Our share nearest competitor. per double growth, next it’s the more than believe I

And so stay the going focused to we and are medium to continue on long-term.

be are think get good I adjustments, we nimbly things have get at wrong. or right we will to things we we clear very when making always and

Thank you.

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

thinking issuance, appreciate banking? Maybe markets Good for liquidity Denis’ your outlook the we are in in debt banking, debt about increase backlogs? And improving I just that, your mind, seen to you Is big so outlook on least. comments, the at investment for morning. have in how Hey. the a generally, monetize investment thoughts just a leading beginning indicator for some Thanks.

Yes. Sure.

of with market-centric – that think dealing was one very our over-amplified and are normal. is that XXXX not it’s think the capital I we business things I in

were way spectrum activity, of lot They of, and second forward. a massive pulled excess that the of normal. kind by created were inflated XXXX on The would And I stimulus of because down XXXX. We fiscal half XX%, activity, first years over the monetary meaningfully were not year activity markets the XXXX call, conditions disruption, the fixed S&P XX It’s NASDAQ XX%. equity market and the then we in had in down. down of that both tightened income have

spectrum. when the quarters. real that time it historical of to time My kind had quarters people would of period four takes adjust. that is experience change values a And six to be period asset across in of happens, You for a

realism you it, quarters by $XXX. trading certainly, for financing, think about so somebody And goes that and about next quarters, values. six had more at are quarters, transaction either quarters, down stock five an if or And was ahead $XX. you you still $XX if about couple think the and of it’s of you four they have then about XX%, suddenly, stock at reset it’s $XXX look a thinking when M&A But if for the or the

think we So, I are into a journey well and expectations. that of reset

think getting it come and obviously see the be a to my And bit better. people to starting more be commentary. are confidence. additional but too, tied to half ‘XX debt markets of point but it’s to ago. have we their quarter And the commentary, of Dallas it’s of would of are or softening softer a that will two landing really because be some affect interesting, think tonight view People investment-grade another of it kind But opportunity would than was where improvements, with expectations meaningfully others, were further a or capital quarters people I the I quarter I And little XXXX. watching bit market. where more That reset, might macro quarters first. heading say in I I also, some will the back dovish, would a it’s little two to would

So, think changed. I don’t we I anything are has that. think going fundamentally through

I as think in just shouldn’t somewhere look XXXX the these very look They at you you But as normal. are capital businesses markets middle. still normalized big businesses. normal, shouldn’t at XXXX is

and a is how any given how as the slow see follow-up business sheet, about maybe macro we been reserve platform get the start GreenSky Marcus, slow. you you is provisioning. Just is in slow? desire provisioning grow business. levels and already trying just I to But think to on kind Do balance the That’s on Right. a but shrink the of a growing reserve rest levels? that of drag there And big and know your as to maybe on assumptions obviously to where profitability high picture better are your cadence are? that reserve in your also

Sure.

slow quarter. course relates we growth, it activity of origination slowing did actually the to as the over fourth So,

have changes those credit underwriting, of tightening course to number of we of provisions. a the Over some the our year, implemented

originations. slowing we to the a said, build opposed to of of attributable so the vast as see actually new new originations. balances majority being did And That was the existing provision the

going to also something we very that watch that’s So, are develop. carefully as things

have ratio a function increasing. well notice You coverage our our our portfolio, in but we what macroeconomic as outlook. overall observed as That’s of

And our we so have reflect which made adjustments, the some economy in best forward. performance going estimates for

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

forward joining me to there the Investor team. questions Otherwise, reach Since you speaking And at thank would on questions, Thank more arise, Relations hesitate the of Day we to seeing for XXth. Investor to and February everyone we no additional call. look like you. to certainly, you don’t out soon if our or with others many on please are

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

You may disconnect. now