The Goldman Sachs Group, Inc. (GS) 19 Jul 232023 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 2023 Earnings Conference Call. This call is being recorded today, July 19, 2023. Thank you. Ms. your begin may you conference. Halio,

earnings morning. Thank of Welcome Carey quarter Head is Relations you. to and second Sachs. Good Investor Goldman Chief Halio, at This Strategy call. conference our Officer

the this presentation. not reference Sachs by on our the Dennis measures is reproduced website which found and be of Today, Chief we This forward-looking Investor Note, statements earnings copyrighted may page the [indiscernible] Inc. consent. duplicated, today Financial Goldman Solomon. rebroadcast will Relations joined Group, Executive www.gs.com. material appear our our without Officer, and audiocast Solomon; our on can earnings Chief presentation or be release on and of information at non-GAAP and our Officer, and I'm David Chairman

the pass call David. to me Let

and good everyone. morning, all Thank us. for you, Thank Carey joining you

of quarter, and of billion $XX.X and net generated ROTE ROE an produced of This per an X% of we $X.XX, revenues share earnings X.X%.

by quarter reduced to our less asset the EPS business consumer several future. ambition. items narrow shifting model firm for and particular, our Our positioning results In to items for and are were businesses executing wealth a transition related impacted X.X a the in, our strategic on we these the the to All ROE and capital-intensive pivot by second by points. $X.XX our percentage management

businesses. challenging and particular, in our environment mix by macro results were also of the impacted Our headwinds facing specific

There's tensions to growth. with cautious course maintained the corporate M&A about it grapple equity capital structural fight and know a to the few markets and investment inflation U.S. are forward starting around areas optimism risk-off we're trajectory. activity in the there the are to quarter. we core and already, the progress that levels levels persistent data businesses our more near be economic see up are particularly are inflation, slower spots lows the activity. question, as continue to capital clients should recent of many But financial showing hover in system of no pick to increased world a formation the in Activity to decade-long and lead posture number and dialogue. seeing and indicates of over banking begin geopolitical efforts largely of catalysts a CEOs we Fed's And

ready while However, risk backdrop maintaining the we posture more our year operating firm evolving unfolds, the help navigate stand a clients prudent the and efficiently. to

of Investor Importantly, we in and we laid clear in mode. our Day set strategic out February at a are goals execution

trends client returns markets franchises global to scaled business, an deliver wealth with and fees management revenues and show a continues that and These reduced private environment and continue our other activity to lending. have more of X very world-class banking aligned a incredibly underlying and goals levels banking asset Investor things. and strong platform by we of solid recurring growth are businesses supported with We strong even number management in Day with and a

Goldman Sachs leading track building what the a trusted does. a core is individuals, First, adviser businesses, as relationships world's institutions of long record serving to and

the Next, client-centric mindset.

make be to X Sachs Goldman with to last ethos. the our serve holistically to bear feedback efforts operating opportunities Over gains. have Client years, and further clients One of we our strengthened continues capabilities best firm's encouraging bring the we to and see the highly

geographies of deep world. differentiator a and with platform and across key value that around We have also a products, to the our clients solutions capabilities span global, broad

for make exceptional of And a this people. work is collaboration they underpinned our difference hard and have to They and all are culture We by clients. lastly, differentiated a excellence.

business the capital and strategy intensity of deploy that pleased progress, our our also We multiyear reduce our are to capital.

quarterly our recently $XX execute the announced February we we dividend. announced and repurchase to program in increase billion share continue on a to We XX%

$X.XX a We XXXX, of tripled per dividend we dividend to have more have our from per made a than $X.XX priority rate. our since competitive it beginning the to to grow share And quarter.

our and volatility, earnings lower to ongoing further. are well it positioned strategic firm's the reduce grow we Given capital efforts density to

are I that on focused on Sachs As firm. moment meaningful Goldman the This and business of strategy. the are in cycle for laser driving strategic we making said, headwinds same the the At our tough mix. we executing economic evolution creates our decisions time, are

period a I will deliver factors, fully results. shareholders. these confident for both remain that returns no our we're surprise on going should at on through-the-cycle that come that Given of value of significant as mid-teens to we lower targets

to for detail. more I'll over Dennis to now turn financial results in cover our it the quarter

Thank Good morning. you, David.

start results we earnings presentation. generated our million net $X.X and second In per Page of billion, with in quarter, of net $XX.X of the earnings the on $X.XX. resulting revenues of Let's [ph] X share

related aggregate, with percentage quarter, and including items loan unsecured impacted X on these our our the As quarter impairment results. for the and in a earnings net gain for sale by EPS this points. process items the David $X.XX and principal our goodwill have ROE to and mentioned, Asset by These $X.X our consumer second results within Management market's investments we items from reduced by well Wealth portfolio as GreenSky, additional X.X billion business' platforms. In X operating are a detail provided Losses that connection historical results. in as our impacted

the produced as $XXX segment, million strong year year-over-year Advisory period some a below starting Turning signs Equity by remain the quarter. of Nonetheless, underwriting second remains quarter on versus in revenues and strong significantly markets, saw Page billion well to volumes were amid X; revenues of revenues the completions. lower Global slightly million prior we rose Banking positioned performance revenues to $X.X down very clients. second were down $XXX of industry and XXXX underwriting Markets remain capital the to long-term continue reopening as needs versus medium averages. of our to remains activity and of franchise well although Debt we support client our in muted.

and We on completed ranked across debt equity underwriting number league as as well high-yield tables year-to-date and basis. one M&A in a announced the

quarter, Additionally, remained posture, in in This prior clients in were the intermediation revenues flat from quarter, in net financing in $X quarter-on-quarter, were financing strategic Fixed billion year-on-year. Equities primarily benefited $XXX focus risk-off quarter were currencies. relative rates a advisory. primarily billion ongoing roughly a active revenues the as in balances. backlog our to our we by Fixed revenues million. revenues record year an a offset and $X.X particularly derivatives. increased were commodities, $X.X decline rose was in revenues, largely as net Equities and billion

across base to and continues our further activities growth. deployment see opportunities durability revenue we of grow equities to the Our financing to attractive as these to continue strategic both second priority yield increase support results

X% down by $X.X primarily Asset results driven under and billion, year-over-year Management to to & driven weaker debt of increased supervision. Management and investments. by Wealth largely Moving in a Page $X billion X; equity revenues X% higher other record on year-over-year, were fees assets

and Banking lending Private also a were revenues million. record $XXX at

momentum specifically, generated as continue of remaining in balances losses by this deposit of to to on all were million. of business We driven higher portfolio, More Equity in we by benefit the Marcus sold portfolio, investments primarily and of of loans sale approximately related supported substantially Results during roughly net in positive investment estate from in to portfolio. private loss due related to office-related a principal a $XXX NII. investments we largely $XXX the of the of see that public million our out quarter. losses had markdowns a net $XXX real and commercial $XXX million historical losses our million we approximately gain

billion have in we portfolio Importantly, approximately now down the than XXXX. billion, reduced $X more public $X.X to from

investments $XXX Debt million, with revenues performance by estate the year-over-year weaker real decline investments. in were driven

our portfolio reflected results our operating Marcus our In in also $XXX quarter, half approximately XX are aggregate, from of of This percentage CIE estate-related for by and which impairments approximately loans experienced historical year. losses principal margins for the the we the segment negatively points on investments the first the expenses. from million impacted real

Now $X a by long-term billion and trillion, supervision ended market at inflows. XXnd assets record our fee-based inflows of of long-term appreciation quarter billion firm net as quarter with the under moving X; of Page as well consecutive $X.X to driven $XX representing total

supervision end driving million billion Gross other third-party the quarter of $XXX X and now fundraising assets quarter. first to the on for was $XX billion $XX for Turning for $XXX Page and fees on half the quarter, at second totaled management the in of alternative the year. alternatives; billion the

billion $X number $XXX to XXXX billion. Day a $XX In billion well billion XXXX the and included Total billion, remains investments, is third-party Investor since on we investment sheet of bringing approximately achieve principal target XXXX well On-balance principal historical year-to-date this and alternative our by related us billion. portfolio billion is fundraising target of investments now second to investment our to quarter, which of achieve positioned our portfolio. $X.X a reductions of $XX over $XX approximately below $XXX which reduced of to very CRE-related historical putting our year-end pace portfolio sales totaled

balances Platform on by were consumer Next, loan $XXX Page and Solutions in million, X; growth platforms. driven revenues

the the we sale of GreenSky earlier, million associated took noted exploration impairment As platforms of connection quarter business. with this potential a $XXX a goodwill on charge consumer in our

portfolio. intangibles a held continue sale, for to to to took markets will business, will action regarding to make we unsecured should sell quarter respect we we moving the for evaluate its impairment loan Greensky to We our similar and the decide determination last with also

share appropriate. updates as further will We

you'll stated reduce the that Solutions goodwill been efficiency the the Investor would impact of our earlier year we recall this Platform year-to-date have ratio goal. the the the by making impairment consumer segment Additionally, are we platforms, ratio in to end at for better Day year, that we than XXX% and our efficiency of progress. in expected said Absent below this

net firm-wide $X.X interest On billion Page was quarter. the X, second income in

portfolio versus quarter quarter. was $XXX total the at loan prior end billion, unchanged Our

consumer million. For charge-offs provision to growth quarter primarily our lending within $XXX the second and net Provisions higher due losses was continued the in for platforms. our in portfolio quarter, were credit

to Additionally, within portfolio, releases reserve were build balances. our by wholesale offset due lower and a partially impairments

we've CRE with exposure. type roughly property the providing loans diversified are only to a And added X% the Page the our our small represent by office a relatively lending new with this left we overall of on well on Moving percentage slide XX%. detail XX; page, category. quarter, of book, side CRE in additional Starting

the feedback CIE loans process. detail and investments. approximately incorporated you on exposure right of have from page, the asset-by-asset sheet aggregate and securities portfolio represents the sell-down of equity securities this CRE-related in net conducted Moving the of additional see alternative to We XX% investments Office-related of and category our this review can of other approximately a on-balance portfolio financings. the we comprehensive debt X% side quarter our and

alternative sheet investments positions more on-balance representing principal these geographies diversified CRE historical investments. the than medium we XX% position exit are of across Furthermore, X% are that single the and investments Overall, intend the term. of investments to no over with total

portfolio. risk We remain on the this continue to overall management highly focused of

were Turning billion. on quarterly XX; $X.X total to Page operating expenses expenses

Our provisions At includes year this year-to-date compensation ratio reached net February, and in organ is of it. surpass have largely approximately $XXX line year-to-date articulated which million of Investor with state to we now Day severance this we costs. of sight XX%

was headwinds. were Quarterly $X.X the billion. in expense inflationary is down previously. non-comp items, face goodwill by entirely driven and non-compensation even CIE increase in of second the expenses The for I consecutive Absent discussed quarter, these our impairments expense the non-compensation

first Our an was taxes effective the earnings. tax on of non-U.S. rate increase 'XX in half for

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

XX. Slide on capital Next,

end X Tier under will over ratio is the XX% second basis that points in of XXX equity common become October. our standardized was which the requirement the XX.X% at approach new Our quarter applicable

in and to $XXX to including of the us our nimble client the deploying common pleased our quarter, reduce of our results The capital common allow time. SEB over support we dividends David stock point As stress our mentioned, that continue strategy capital recent the and our XX $X.X to of the business remain in dynamically help billion $XXX are reduction improve stock confident franchise. will will basis to continue In we million remain density test shareholders, to million. returned of repurchases SEB to with

million a increase Board intend repurchase to going Our quarter. previously dividend in approved sustainable complemented competitive up our the to dividend, our $XX growing of increase by buybacks This a a share also enable XX% in yield, announced shareholders we the us maintain step will per beginning our program forward. where level and to has third share $X.XX pay

for for confident quarter execution to shareholders set and second our while results backdrop business in as our of ongoing remain opportunities challenging well our will Sachs. ability deliver our help In the return future optimistic strategic support conclusion, reflect our several These actions. Goldman overall transition clients We a initiatives about continuing and as profile. remain our improve to

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

Instructions] Glenn to [Operator Evercore. We'll Schorr first go with

that to about we medium-term I So the target. talk want towards that ROE how build

So by obviously, this was the -- this quarter was write-downs. depressed

with We markets capital point. start Let's be X-ish activity better starting normal time. in know a will

looks So I than closer know right we're now. it a lot

ultimate If in you or exits. right? out to free of spelled much year-to-date A) way. a you My want trying X, the that loss capital look it if just at $X.X a reducing that goal. way, B) up it Is was because didn't good you in And I'm like gain there either Investments question that related to Page those that historical look is where capital Principal Or to towards how big the build that do related quarter. declined to intensity billion

our a Investor of both in the a I need And Day that laid for at been as terms on we line our drive been you journey well as that of question. in of first a top and towards for increases years. there working number over things we've targets thank Glenn, particular to second number we has efficiency that capital the We've of reductions think achieving ongoing project The had efficiency. through-the-cycle those quarter. out the terms returns, continuing capital in So to do are

down As AE if reach you $X HPI target, total billion. we know, the as about to expect we we be -- approximately our billion. reduction ultimately $X And

around that are I because your around didn't where on you reductions focused some The things, looking touch and question Glenn, AE public reduce -- the the you're meaningful was thing might be physician. and Denise X continued it just just marks journey. want a I at that, there add to Yes. whether where one on there just -- the were

a public those and positions that sell discount. that So you at mark market we night that position

clear discount are I wouldn't be believe decade. we valuation adjustment as our material time, a at these given context like laid you a you loss. Clearly, level could it's you really process. believe journey and that investment a of narrow activity worth firm. and nearly don't the ambitions than about slight important believe through or anything a are at emphasize to is banking going positions private business But a there on get more So of in consumer businesses. there's the lower makes we up banking focus constant. that a There that thing global keep investment X big the lower lack to obviously this seen I'd X/X that's point business can returns performing activity, deliver out out than mid-teens we've in that is to the you that gain. the We level that, banking the We and cycle in others in the where of a and and Investor markets sell return that of say that of what were call I'd But Day

that very on a progress percentage through Day, as I path to legacy our on the At ex narrow past be X the management Nachmann that of will the that, business. addition, out margin businesses ex to the are firm and And Investor a we'll got which drag X mid-teens the believe we're single-digit XX%. cycle. point, drive at move in a is In continue target management that to clear and platforms line making that that high you've we up to top which mid-teens to a grow these return and the narrow Mark sheet asset the the balance we legacy sheet balance asset by set laid

think see about in way environment I'd better you environment the need But it. a to that's that. obviously, this So

X of fashion, And been reported conservative think, all I in I all appropriately lot about just have of -- banks I that. appreciate that of investment picture. And you think varying couple the last have over days Goldman activity have returning. maybe the of couple markets quarters. big Think optimism had that typical last a degrees capital over banks

you may just maybe be what or on a seeing. get not shoots So green may mark-to-market I'll

You mentioned would great. was your of like advisory that, just contextualize kind be up; pipeline that

kind that more to many X that when we're reset. surprising Sure. feels X of earlier and that call big reset, X of you last about definitely you're fact following. other of better on in at I'd have this starting than quarters to And to on in talked the course the the to the felt see year. not the you get quarters it I've past takes a now talked activity. and the X or X I've say It it times when weeks over It's

it's So the and sharp I tend what banking can't tell at more journey they exactly year to investment That activity. back macro to a M&A look definitely so other historically last environment I created But improve. pickup dialogue periods when equity then capital has where go markets feels There's definitely drops or better. in been in for and is. start you activity, a I the they

so And here. that feels I to we're better. see It think definitely starting

been XX-year the to inflation But we'll and know this The see level and sentiment and has activity think I forward better. loans I normal not be investment on have client is to that is data a going activity the banking better watch of now basis. journey.

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

to back the around -- or there on infrastructure-wise, we we the up and expense think that us the half, guess to be the last rightsizing but just headcount-wise, back maybe where sense the question, efficiency David, the obviously for of so, mentioned it want about the you anchor as I XX%. pick potential give first over given are just business, when we've seen in we you as a slowdown year base target

the in rightsizing there minister think Gold you of Just of give where us a terms base? and sense where the expense get we how just

Yes.

and granular think think of But with made year. I we've set more some of I will So the add I'll -- made detail. out couple a we've We make on Dennis comments at some beginning the targets probably progress.

sight line heard remarks, have Dennis' prepared basically in we of for you accomplished in As them more.

You've seen on noncomp been line that these And second done pressure inflationary are the been there extraordinary row. very work quarter real because noncomp our on impairments focused down in expense been have the there's expenses. around of a certainly that. bunch We've ex there's a items items for

other hindsight, with that the environment go when in trajectory of the the do compensation, started year end had I'm performance are and I we took again year with performance-based this as resuming we sizing. forward. specific plans couple through work of far next were I'd think do where glad to go before we we this the we process but on actions have review watch that we and headcount We in compensation which on a that revenues is we no year We'll now. early headcount starting pandemic at remind we January we very about that we feel the regular the of stopped we've are. during everybody. will our a said And good so the

always of key banking. That of that adjustments we to a just franchise. we're think firm. franchise if low changes. investment activities something We're not We'll extraordinarily an is But going said, as the we make operating erode

are So on things of recover. efficiency this a little and support probably uplift as obviously moment more a that is bunch focused in operations. have a processes that We bit we to

that some make we about to that. on going project feel technology can big create automation a and have more investments We good and

something you we that time, 'XX else some thing Dennis, we trajectory. time, the do or So extent? but think benefit that specific over will that's have think early that's over

for add to just you. mean I

about headcount So was on year-to-date. end X% second the down XX,XXX quarter, quarter, X% we the about -- of ended

early our metric in I David the as of we're X% in positioning target the the is of third year, probably happy because run quarter. $XXX the firm down we'll more the action million about payroll year-over-year joiners the think reach comparable have towards new metric efficiencies. But rate said, taking in

quick maybe just follow-up. a Got it. And

in I I pace a back correctly, goal half. think the you if step to of you mentioned buybacks heard maybe up

that, what the level what that take And industry incorporate big expect? how XX final if plans? maybe what your put months when deal how Basel unknown we big hearing, of buybacks could they an the Just look is in rules numbers from may of before know X, you So like? NPR, some terms of capital it is we should feedback Fed a around deployment we're

Sure.

of to So the answer pieces my for question you my the have to answer. question

level the points we would what excess basis the to our activities client grow committed we're that to we CCAR and there. increase intend -- of So increase say, been have to capital with cushion. into our franchise dividend growing very pleased deploy We dividend. continue to our obviously, very of going some XXX our sustainably in announced buybacks. We results to We've of

of also for phase-in We even Basel will in will implementation There we XXXX. some get suggestions in will the be revisions beginning rule. may which we are have rule. a a the That There period period. but that III implemented, a period recognize mindful that's comment a be of

So think the manage should think we our franchise our capital for as way be client about we for we and which shareholders. optimizing in we

going a guidance intervening to We the we're new make we're -- and continue sure but period, any adopt so obviously and position to time on do will to to in early in firm indicate that we to intention is and where shareholders to the to it to would and grow manage of up our capital we deliver capital are. we step returns from that, thought

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

actually price being look amount recently GM. you’re of with consumer suggesting fair receivables Apple to price I even and covering a additional some speculation discussed. sell be speculation been some to there's business, know might the partnership how representative of -- might specifically tied not David, what's you

helpful your consumer the just competencies. that So maybe and for vision the business, priorities of strategic about core hear some with fitting in not recent facing maybe given how your with to challenges it your business aligning months -- evolved might just be has your

Yes.

this So way. question. And thanks I the frame it for

appropriate been made with fall, that our been down As working wind a the for GreenSky been narrow options which the wind of our We've drag exploring with said hard with to ambitions which and markets of. rolled we've the executing our partnerships. ago, are will We decision out definitely that. progress I rights Board better. the of travel working you now the difficult have of are operate on included improve on Apple the They execution the that. the execution transparent but that process card the that. and year on been of completed operation of don't portfolio obviously over have credit of and of Marcus can we which kind making clearly down and very we're partnerships unilateral the reduce the do with sale direction GM them. And we're consumer long-term loan also And to good in think working and them has also the know, and to We've

we card And it partnerships and into on forward to continue so XXXX. drag of the significant reduced smaller reducing those as gotten credit that has there's focus will And drag. move be a

We continue successful We grow platform. deposit to Apple savings deposit have a platform also an our launched was launch a to base. which very strong

to the And moment. course we're and on so that's we'll continue that at the deposits grow

my fees billion on an equity half follow-up The color. actually in financing incremental great year-on-year. the Maybe specifically. It's $X contribution first just for in implies

significant saw the years, trading both as from in the highlighting look FIC? few over And half the grow commitment and the understand, first that been financing as component You've how you definitely to of of better a one, do just the the across out next the wanted expect business you financing as piece. gains contribution the to we well durability equities to

the focused did going a think to strategic equity things strategic I'm we in last been we've not that more focused and time. for our I equity the the based Dennis and has detail. made were decisions been decade, were of and because high-level progress a worked expanding we very and base last the have -- And and position we remember the has clients not made there at good bit with franchise you strategic have what doing now. certainly a there that business back we're with financing franchise largest times little clients and that were a reasons done But over in us we the position the made priority I we've this improving the will and real of in we're also some of view difference. on then with that So over just decade X there give a growing start going on But where

good the I and it; performance so, And accomplished has equities what look about this at about very the good we and very good team quarter from feel the very about feedback get clients.

Now financing broadly, level revenue durable more market obviously off risk than risk revenue by it activities. overall intermediation but is on, affected and that is

bit think than in And can expand so there Dennis from a we how meaningful about much more be a little variability capital perspective. risk on it a can more but a intermediation there's revenues. and base stability there that that's

Sure.

So is travel. that the of direction strategic

that We and and combined this are grow of activities been financial those capital growing. percentage to capital, FIC nearly a equities are lot equities time and pick as has something the of overall Even revenue that's human XX% of and financing revenues continue equities allocating quarter resources, to financing grow. Equities a

very remain a on multiyear and focused share of So that activities to also holistically over period. grow prioritizing virtuous space that market commitments to reinforcement with a clients And cover our we're there's more in observing clients.

that of balances changes identify market share across in levels sure behavior, that in It's portions we're components David's the base client in with the dividend changes drive taking we've and there's client make and of paying intermediation financing the dividends been valuation recognizing of to comments and across which activities and respect systematically activities also base. capturing both underpenetrated more to sort

So fluctuate to relatively can than remain activity. It's intermediation like on more it growing other that the line durable items, forward. committed but

Morgan Graseck We'll with to Stanley. go Betsy next

Just to on one then that follow-up the different and one. a question question. last But just last

us puts a want would So would quarter from. like would there's you jump about good And understand. us how think of revenue grow to you I that helpful. of on for talking to durability wanted when that is was about part you mentioned this of Do be you financing, you point takes feel were off what -- to how durability, that think any and if level financing

Sure.

is softer by a both had was financing, I'll over a which FICC That episodic more comment equities. In lot higher. income, and is we financing levels So driven those were period-on-period. component of on activity which fixed performance slightly fixed commodities-based

periods pleased our think grow you we predicting that commodities-based of and our components of have to with second and for we cautious equities opportunity the see intend other to prior grow from activity revenues. to repo, grow for to continue I remains share do and to the think type We're the here those growth performance continue to do contribution financing us fixed to balances is hard that but deliver we quarter to to we'll financing performance. record unaddressed but grow in market of there continue of of so and period-over-period types continue work in financing, there still but lending I'm lack deploy like collateralized activities. And was I off always those think from the growth about forward I think

significant excess, have obviously capital excess. highlighted you And

on follow-up opportunity guess the earlier was to So deploy. III game. there's in an that that deploy. to between I This Basel comments had versus flex your buybacks is I the end

that of in of phase-in when meaning just got on again, And want mentioned I on requirements And asked the not you context say position within the to early. had financing. a opportunistic, of you be think but the period course was in I that early that whether you've the meet question with opportunity look, guess time, question this I or you're to I early. -- kind you you

think meeting through financing versus it might leaning into So other early have. options how you I should versus

Betsy. Yes,

I appreciate So that. look,

unknown travel I we're out. the about that's lot years think this. talking there's a And of direction about on

And time. so I on we focused are the firm generally of a think there sure lot the of -- the generates Dennis' was because making earnings. we the cycle early on deploying getting good were through phase-in But generate period, we in no, message capital context on

of service deploy talking of to a return to going that in there as plants. are we're shareholders are We and bunch opportunities about to that

where of more now gives we months the look we said, to the option felt to be strategically, point, as buybacks. work And the done greater ago, have us more we've sharply needed we deployment up Dennis to same Given some step at XX as X have much capacity, cautious. flexibility we which to maybe the opportunities

on we about be It's You out; the that we're of clients just say focused very But view comes uncertainty. comment very when going there's ways very, to phase be periods. should lot I'd serve understand adjustment whatever it. a thoughtful to of there's delivering in to shareholders capital we'll and a and

there's so be what premature do. And going about we nothing to

with Wells go to Fargo. next We'll Mayo Mike

and Do Are were are debt that for -- you [indiscernible] seeing big I with CIE Look, think picture described headcount? you gets? keep and here everything and you that any what is that ROE? David equity XX% GreenSky is question bad count rightsizing to equity on the ROEs or simply, midterm your of this rightsizing consumer we it where were with CIE, And you to the accelerate to investment investment marches this head investment as enough? feel any with to the journey with debt X% does going captured debt the is comfortable conservative you severance to as

over Okay. then Mike, I'll start I'll it's and David. to turn Dennis. it

net we We're effort at also And reason was to connection our with balance of because focused of severance. the as to effort going was it to balancing protect our reductions well out -- sure much for to designed to our are So of returns think ratio just quarter terms be in in expense compensation out, for we we're that an the upside. important transparency shareholders notice severance sure but of provide have then. you majority headcount that franchise, comp XX%. in we what we're this making we're year make an first will protect on pay-for-performance that's accruals the talent, our the the components called call that business capture the capacity with making positioned levels that expense as Ethos of making million year-to-date $XXX larger much, The our vast

to overall to compensation We're are So, we I'll out that taken disclosures what help do. on the we've efficiencies relative help payroll is the severance for to set and you impact more level color largely the actions and give the David severance but accrued will done understand picture expense. just the you of of target designed we've the understand financial what

important that question, sheet. this moment some environment your out, that of And things quarter think sheet, the to is bigger at Mike, us. meaningful putting a an do legacy that's behind this balance things call of the was decided one to to we on hard been that's strategically the respect With balance very to I

as are the environment to We the could have worse, legacy revenues environment sheet sheet still positive reduce. of legacy sheet balance we that too. got if quarter, from the next But improves, if we balance balance reducing well just but

firm going continue long give obviously but tough balance we we're transparency the to the had around time. quarter that to continue on move a to was also in. you forward. and a sheet going items This We're been to legacy we I've one-off So put

I in environment to out think see you'll strategic and very the be making, working team that a path the and the clear very, feels decisions progress better about feel to the we environment and wealth on, improvement performance. execution feels as better, if environment. we're see better, the better good environment management making But in better a leadership the that turns we're asset I operating a we're

It'd us see externally looking medium along metrics way to nice the should at in you How progress? this accelerates to this be for term. what term? -- be can mid-teens we you're And taking charges you the that get And transition. the this medium that ROE to and some remind define so the do looking because extent pain to you're

couple date well the really to mix that we that are banking business, very we cycle. given do have X we're if markets, our a and next Well, make investment the what's business, business now business, not for we're XX% a environment a highlight, But go a Mike, where next to banking of and progress. to just Global and in perfect right we returns that and low is going Markets. The X very, I'd over Banking to are performing I of significant leader going progress, through meaningful to the think ROE the but years, believe back years, make will when you at core mid-teens deliver

should going growth improved X us February, us. more margin The to asset take of is sheet to balance the we respect make journey the help and line uplift. to reduction progress the to the an And going for clear and make working with on environment of going it's about take journey revenue this and the to on management we're see So continue were years in we're very clear to X to and We continued it. a progress. sight

UBS. go next with Hawken We'll to Brennan

you're seeing spoke shoots You loan to how and you're sponsors market the banking curious green come we back given can that important to force? or to down the drill side specifically whether in and understand earlier in see they cohort franchise, before that are your to seeing not recover with what need levered banking full

Yes.

important. halt. highlight our very is I'm a It's question, M&A way Brennan. M&A at good glad thing. business and you to give us financing responses look activity. I of too it question. of When you're that about come this There's side. side for a The very, that's it other an come It's contributor buy to that come important our significant it's asking There sometimes side and The but us business, and halt. a obviously to M&A thanks to kind So X and think sell because side and financing has to also are opportunity, aspects It's sell it. hall. stuff a gives buy markets capital a staple the

one financial thing Here's about I know sponsors.

all be slowed we're they that in a has of look for They're forward sale of pace particularly sold. here. I This all better environment see has a they environment Number This going assets. one, the we that. accelerate. to bunch accelerate own for down that And environment slow will been will think sale from as a and

dry money powder, make can't Secondly, they they have unless enormous okay? they And deploy.

get you to soon as place, so We're starting reset people are see a the as financing start that. And see and to understood, values costs to of you some deploy.

big transaction obviously, very, very quarter, this a FIS. around saw You

going, I think And we so as move forward. you're [indiscernible]

meaningfully the So this it this that is part quarter, will the And important investment tell enough to environment. in and a you it's volatility I'm of came shutdown banking to the next of quarter not ecosystem change a very, improve given of and smart investment reasons speaks kind kind level, your very other XX-year financing at the an of activity. markets. availability activity activity Brennan, from component of banking part to the And why health is important an in investment banking one it's of question, And of running lows. to kind of but

underwriting could in appetite environment We transactions. market. capable There's risk for own be I that of in also these to also have can funds firm. believe certainly this activity our activity within we think an our attractive of both source a the we support financing the transaction are into to that distribute with clients deploying principal buckets, facilitate and number of

second, the how my it. sale? that impacted Great, then reception you the for saw And And been that We you has expectation asset? goodwill that impairment. the for could appreciate quickly I What's started to selling process of your GreenSky. finalize

the in of terms process, in of process. the middle we're Brennan, the obviously

feedback. have We

accordingly for in Goldman with And integrated We historical in the we with could P&L I much and process think platform, and to move we you'll release we It's that on good million to balance you impairment we sell of respect we'll right to for point different loans That happen the for platform book and this you number Sachs. down. and we the we'll potential have we at see lending business business the Sachs. platform designate book, It's transaction seeing the extra think in the the be loans a explore Goldman And consider that forward. impact decision could as terms unamortized on into We should written not the sell ways. sell it We're so business. Consumer GreenSky, future. the to we a associated on the the made goodwill as perform do for just remaining basis to of approximately choose with alternatives the color, goodwill the no held should bought mark segment. We've it fit the $X.X has written a We about share sale, forward sheet. how billion. There's because could quarterly reserve. had the like a Marcus intangibles down well. loan it's in $XXX that necessarily more

given GreenSky strategic So process but those else there's to I activity could of say types we the the given about don't forward things the occur where that the think are on are. anything

We'll to go Devin next Securities. JMP Ryan with

we on financing. hit In markets

So great off it implication bit from did better also intermediation on here. But based the just a on last were obviously, look quarter. at results, looks like the quarter results you a in year. to quite want conference I And the the circuit late than

would So implication lot that got intermediation. for there just June better the be a

couple? to And to want has normal I and the then Just just is month read to that feel sure trying the And make about that did more correct. of the first a So cadence like kind June quarter relative think continued? there?

Yes.

space. look of started you at I in we're in comparison thanks, Kevin. when that the the space. was mean, there activity So And one commodity is out and pointing an differences in big enormous word just the of the were coming I'd very, the highlighted to very clients positioned Russia year-over-year we period where this well and serve back. appropriately, just say you

go And XXXX, at so obviously that the we commodities and you -- in second didn't quarter we and that look that outperformed way back quarter of if you have here. because activity

to second better. better. June comment, June think your the was I part yes, was definitely of

no of you tone the in think more we're investor when you April, And it terms March, we're think of overall. about than sentiment what in and improvement in coming quarter. we're there's in crisis different bit were on call a the in banking the was on But out place risk so about was a in early just sentiment of and question, the risk July and earlier improvement coming quarter. on we And of we an out in very little second it, were this a of in there's there early month of

through an been the appropriately. noted quarter. has there improvement think it's So And I

to an just on Goldman. on Okay, driver the it's drivers. that's transaction the a such got really, you there, identified the banking And for And of when business. then the guys of question and It's huge get small is, a the just great. update you as be momentum still kind some market very great

really And there think step so -- if we about about just should for for add you function are this Or growth a more the trying to think Goldman? bigger opportunities much to opportunity the there? how growth to capability? And just become business certain a

that question. appreciate I So

you're it's I I right. think think --

one taking their into that's I time of revenue interesting in the got quarters time. get But more so activity bringing Sachs. the over and value Goldman to to some delivers think really this deposits real time, clients the real of that we've It's said take an on things last some we over platform. it been of now the we're and are couple the very flow, getting will that platform payments constructive is on working

be where These for it's think our time. of payment we I They changes and but people. dispersed the our business kind are engaged clients, are making like for to lots for providers have there a of compete this. right takes most technology so in flows

building is those in So I think long-term focused investment team the the here relationships. on very

companies, given financial sponsor etcetera. think opportunity I kind particular financial franchise. sponsors our around what I a for call obviously us is of We're

to over is time We time. very, opportunity But set to have going take this execute. very a good

one not think we'll a a where, more contribution meaningful those figure is But we how contribution. to out I with hard the our meaningful firm time, things have fine it's base. work this something this think to but making it's over that's performing I a client of can make where business

Thank Fannon you. Jefferies. to go next Dan with We'll

the of area seen? even the growth of going Can as lending, ask you about continues talk and to kind quarter. you've million about about to we continue gain the That forward wanted I an this to private think ex and growth. banking prospects the inputs $XXX lower be

Sure.

worth Management stable as the well think and line of which we the it's seen Marcus been a the within on strong of has recurring one growth we highlighted overall nicely revenues, deposit priority respect we of -- is benefit to is opportunities net I space. have think clients contributing an been the of David with areas more growth like as be overall underpenetrated as those platform activities. to So Asset the which activities across couple inside has piece highlighted for business some activities lending wealth us other have, combined the not And But there's those premium it that nicely. was of We've activities for & as we forward. our feel components those business obviously respect which strategic of with the which and will item. we're earlier, that in the has contributing which the obviously ultra-high that wealth growing had But loans in of area will relatively area on lending the with and Wealth

line some the possible comprehensively we that the sure and have as division number making the item there that we in expect that on aggressively so to forward. leaning solidify and well into a should across be will we them as and of out And new very as mandate quarters relationships very, a leadership can those be contributor we that past clear

give given that as used sight I you which and bit that balance markets be or could reduction about some line the in Great. on sight think to to you you or point on? may think more to you're follow-up, and then up numerically said, have of as terms And just short as opening us in numbers exit capital planning line the and a about a sheet term of outlook receptive talk little of I anything

question. that appreciate I Sure.

current we investments took to at you obviously, historical So principal XX.X%. on

We You sight 'XX of several that have on a towards incremental $XX reductions. said year-end we below is target I would of billion pace we know are line well that that of target. on there billion. say

year-to-date disposition. to have We've that We positions have for large a more completeness that number prepared. on marketed large stages of being number exploring being They're focused and of we're here. processes from a exclusivity we're all on to moving various we moved of and positions to in from offer

ongoing as would offer an highly we that make to up engaged incremental where it's I expect So process progress.

go Deutsche to We'll next Matt Bank. O'Connor with

this has down a obviously very been year for nicely the trending couple years So and SCB came now. down of

questions bring aggregate impacted Marcus of on have SCB? consumer I the and GreenSky as actually and credit loans on of help of card. some potentially what Or sale do guess think media, the of question the exit the puts according those those loans portfolios loan that. loan again, the sale getting takes to annual some loans with how down the the is, And are in portfolios FACA. you specifically the the about the We are and there potentially impact

Sure.

which activity discussing area very, X% that we've I and familiar call process. you're that was that similar feel of And that is been all into are you the we will that's the the think for We I to of sheet towards process attributable activities on meaningful impact thing know. impact year which the just the we snapshot benefit various through revealed get Fed don't you it that are. contributions the with test last X.X% lending we're look, be year to test. in us. test. really to means on-balance And next us test enabling those that There's considered is from But has of us balance see meaningfully the we But implemented our the levels if which from of So as investments. this that remind SCB driver to in move assuming in be continue this the the a for to took very the going next on to the of investments. activities the Obviously, transparency roll is what test these sheet has reduction this due big discussing been components October, down our SCB the year's this that based with that on year would is,

targets and of really path about why remain much our that trajectory in minimum very setting way believe obviously, the that on focused that's providing on those our news a to is until, so our that, terms we understand capital meaningful very, new So and any trajectory transparency reason front. ratios we so

Okay.

sheet on consumer the legacy So more the on versus focus much lending balance positions portfolios?

Yes.

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

you better targeting? talking probably We Why geologic you about ROE very are than as us, investment would that. level to you business comments, -- in strong. the still geologic is public opening obviously, a comments. a go revenues to banking the David, were the think global all access unusually the Can if your you're -- were data focused you at on for cycle. depressed you through 'XX, ROE mid-teens data you need for is with investment know But get that your 'XX you been have mid-teens global revenues look you we data pointed in normal share has that the if out reaching to guys that and has banking your

levels along I'm investment would that sure in maybe But see between. I'll that XXXX my in the you, on to uplift career, of see it's go to in back not but say call that Markets, banking. So of running ROE in in it's Banking either. normalize XX% in course I somewhere years ROE the the below another We through-the-cycle run investment year Markets environment uplift and to kind close that the category which but this overall XX X don't not disclose decade, first even ROE our normal not again, XXXX great I order what's highlight of into for for highlight normal X We has Global is that that bolster lifetime, wouldn't year way environment, months of what banking have investment and and would last to like a the the come Banking I'd the my of separate last this way, just not in XXXX to a do once a banking material for in falls Global years. franchise. over average I

in average, average Our lies I normal, hate the word somewhere between.

activities substantially to, very I not I'm only The contributing the activities. now Gerard, which would that right thing is capital-efficient are us intuited add some sure are of

very, deal a consequence. very And but of beneficial some And so or capacity levels activities are they metric also at to our catalyze overall results. are activity X looking other them revenues have to the as of logic

environments the explained investment that the active investment that's firm simply from So of necessarily banking of in the in more Delta of impact levels we banking, some captured not see rest positive line. across

just Gerard, thing, interesting go add, back, it's you to do. I'd other One if Yes. an thing

If and back that. a and revenues go the look look have over who to at investment you revenues. and meaningfully them, go of dropped the revenues people back change XX-plus at you years, because last report investment investment banking environment There's banking banking from in XXXX

back that over see at last XX the you times other can go can and XX You to years.

from to XXXX. that see You XXXX can

You XXXX. can that from see XXXX to

come interesting to there's to You of can go seeing out you it's is see because at obviously, growth market that don't XXXX in and etcetera, from XXXX. time. and when And what What's different cycle in this of XXXX cap look you're growth happens it to to the at 'XX. I XXXX grows, the the economy, the upshot look kind think going be in

think I is a cycle. this

of that's not and a equity the last It's and It's capital depressed mergers away. activity, X of other We markets financing, services to in haven't there advising And the the while. need seen will destiny, a quarters. the X to the be consolidation, even of our going need for friction, a side cycle fundamental been part cycle attractive for continue look IPOs, headwinds the though for economy. can

for GreenSky. And on a you then question Dennis, helpful. technical Very

Then a held time held for if you it held later that can to to that at Two-part date? or still and for have trigger make when an into sale you will have into should you What impairment move impairment, it you You do a sale? should there's sale. you for move for question. going think determination mentioned that? have take And wait intangible still you intangibles that into to do or you move to that whether GreenSky are --

of we The we when it the move will we as we single to and in portfolio the in designate We such are when make make it that next loan quarter, to that time. point we held you. will. sale we decision, impairment. designation selling evaluate affirmatively as business And intangibles When and is and at you see we we're analyze a intangibles every consequences whether quarter selling the for decision will thank P&L for that also and for the decision So, impairment. that will the the

We'll Securities. from next Mitchell Jim Global take with Seaport question our

credit. getting Solutions efficiency to on XXX%. below the Just is on appreciate Platform other drag profitability. you I ratio an profits already But

noted in platforms X.X% guys you is had would net that think of imagine charge-off point cards. consumer I than I sale lower a ratio.

Sure. How that And So of well quality north right? of SPX as that do ratio. imply charge-off would see the terms cards we is of book how in credit think it kind we in -- and normalizing? that that do about X% where you

things. So of couple a

hand, will the the for tick we couple the that, maturity, quarter, nature environment expect of at operating in do next portfolio, consumer given net of On its our that one to continue the over up quarters. overall the X charge-off the

And down we ratio coverage notice reduced is expected. than this had in as the of coming We But you'll because originally the and we better bringing data comfortable activities coverage of in And that a coming actually ratio. more conservatism provisions as basis. now that quarter also more removing some had performance on well. the together have that's put our actually we we through, are conservative and

expected than as trending say originally I'd through overall with data So anticipated. coming better

to net a Can really of Okay. port bit move kind space. talk haven't trying but you've ultra-high on down the Maybe question and whether where growth? while you're Management. from a AECO made it you what to a little just I it's seeing with the progress Wealth there? follow-up in market in about talked And investments

continue So AECO, ACO we to within the grow. overall something is platform,

to offering. to particular, in do having of of clients. comprehensive received, We our well approach continue opportunities to be to our see more part We C-suite to continue in extremely a expand focused integrated segment. It's by our clients approach number It's on. and that a

We opportunities have States despite as grow both we under-penetrated actually record continue we expand believe the we ultra-high that track a net very, franchise and and to very well. space, the United abroad the within delivering also long and in worth and are to see of

That with closing our Please any continue remarks. will question-and-answer conclude session.

have you everybody. feel look and just Yes. want you, Otherwise, you please or to further of rest We questions, And Johan speaking the me we obviously, reach if with to free for any to out the team. to Thank thank joining. you soon. forward