The Goldman Sachs Group, Inc. (GS) 16 Jan 242023 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 2023 Earnings Conference Call.

On behalf of Goldman Sachs, I will begin the call with the following disclaimer, the earnings presentation can be found on the Investor Relations page of The Goldman Sachs website and contains information on forward-looking statements and non-GAAP measures. copyrighted The is Inc. Sachs cast audio material Goldman of Group, This may or reproduced be without and duplicated, rebroadcast not consent. This January call XX, today, XXXX. is being recorded

and Solomon; I Executive Mr. Denis now turn call you. to will the Coleman. Thank Officer, Chief and Chairman David Financial Officer, over Chief

may you conference. Solomon, your begin

growth, for of than The escalation a you, proved U.S. failures including Thank you to and headwinds expected was financial XXXX be bank morning, good us. operator, resilient despite of economy number a a to Thank more of regional tightening everyone. joining dynamic tensions. significant geopolitical year. conditions, an and

Against this backdrop, for of execution Goldman Sachs. this a was year

In core addition further we our strengthened focus, businesses. to our narrowing strategic

half soft As optimism has we enter the landing. for XXXX, first this for of renewed potential a rate the year in cuts

on already update are in reflected with backlog. We in resurgence signs Denis potential and which will financial a seeing strategic today's is activity, comments I'm the presentation strategic results. starting our of provide

further with opportunity franchise. our for leader serve our and on avenues partnership, to stock take the Page by financial client to further of created underscore years, of We value have excellence an Strategic our world's brands simplify the aspirational is And as shared our our institution, bank be to strengthen our service, this exceptional we to financial as a highlight services. investment and the page most asset across Goldman and last united excellence. one as commitment today over wealth management. preeminent to objectives XXX Beginning and Sachs the most We've integrity clients client strategy aspire relentless progress well X. on continued global growth.

Page positioned achieve As X, franchises are world-class strategic that have well interconnected these objectives. to we we two and on show

clients equities with business. investment franchise merger First, also includes includes our top an #X markets capital & uniquely our It X we positioned geographies FICC bank Global Markets, franchise, which serve and leading rank our are across and our products. and top unparalleled Banking franchise to

trillion And asset net business, top This and under manager Management Wealth wealth second, and Across ultra-high and scaled significant is unmatched our $X.X premier assets over extraordinary supervision, growth. our management we global we operating Sachs a active opportunity leading talent One a X franchise. our bolstered see unified are with are alternatives a Asset two in worth a business where execution & further with businesses, these Goldman for by where ethos. business

In discussed across priorities we We total number X, & progress out FICC over maintained X Global recent the the Banking we've revenues in these XXXX. key Equities, record Page & lay and businesses XXXX that improved of most a Investor standing our across leadership investment our generated XXX in last our positions years. with Markets, we across banking. clients. strengthened On demonstrated top have we at Day have financing impressive and our growth February

base of revenues. fundraising billion In ahead by and schedule. and investment driven fees one year, and more investments growth banking revenue we historical management our consistent a solid & $XX and Asset also lending and our we've of durable year other past X-year Management, reduced private and alternatives surpassed principal performance Wealth This target

moment. more talk these each businesses about will I of a in

which sale We substantially quarter. and track narrowed several focus. Management announced them. market's made remains markets this Personal We I about GreenSky, of how we've We important on would executed our We strategic business to of do, to sold our decisions lending loan Financial exited our on and close swiftly I portfolio. all like the Before speak business. the sold

the in our sold We majority GreenSky fourth loan portfolio, settled the which quarter. of also

Motors various General supporting regarding agreements through with to the reached the also products customers in committed another the remain to the to servicing card agreement transition transition issuer. and process We've program our We credit an activities. consumer

I opportunities decisions but growth, firmly to is and when innovate important nimble make also tough seek believe for be and it out needed. companies new should

$XXX Our deposits, here. to consumer ambitions which deposits profile. have from materially produced billion the expect These further firm's funding over go of we have improved

efficiently Now it proven matters incremental scale us and we have win. unit and allows other costs, regulatory are operate areas need where execution. making a our the be allows on focused economics to recognize more measured and focusing our firm growth it to and -- that we in other as to right We more favorable we manage

have is talent. core position, exceptional our now narrowed win to right strategy focused a two with on scale and we Our proven leadership businesses where our

made Page different we market grow environments, X, demonstrating over durability effort revenue financing which relative business to clearly Markets, $XX aggregate. this last and franchise, the share average & wallet leading for has of diversified a Global last of across have raised In our the and revenues the years On of our Banking floor produced in diversity a several revenues, businesses. X billion concerted number and years, these the in

with also ROE of fully have over returns an We allocated years. last the XX% average attractive X over generated

durability executing priorities. Turning strategic has Page X, key of to on a been part the enhancing our

Goldman and table XXX & in XXX since with share These client Sachs reflection equity-related top in Equities, and a our we're #X strengthen completed X In and clients' points high-yield efforts debt. top competitive approach us. are our positions our in of are XXXX. Our underwriting, the clients. in maintained of confidence #X of XXX our FICC the materially basis of One evidenced gains equity franchise in wallet league ranking M&A, We've by announced #X roughly to

significantly Equities of XXXX more durable financing financing FICC nearly together a grown record XX% billion. have & we have at addition, $X to increased revenues. In new since a CAGR

X. Asset to on Page Management Wealth Turning &

since grown together a bolstering revenue We continue fees on banking streams. more of durable and have to at XX% other make progress and revenue private in CAGR lending Management XXXX.

are our and pretax target investments progress We an our margin made historical already basis. principal in on adjusted approaching reducing have also swift

Page to X. Turning

our of Our Morningstar solid channels the over investment traditional performance Over on funds performed and quarter funds of XXth the of our while top were long-term fourth over inflows. of our XX% fee-based funds net driven The of traditional consecutive Cambridge funds, half in quarter across both platform. represents X across last XX% Alternatives half both in alternative top the has years. inflows our

since have we long-standing fundraising track continued developing record. billion of milestone expertise to on innovation geographies across want from early. our been well reiterate $XXX our and where success Fundraising ultra-high raising that have the $XXX deep by investment a I Alternatives as target surpassing result has in a we This in and billion year been over XXXX, has strategy approximately asset new as net with ongoing our relationships. coming focus our worth XX% products broad-based classes reached

but have depth business. I we increased $XXX our platform for years billion of the proud in year schedule target, our surpassed our Day of not and ago, seats. we a this preparing reach When the Investor of demonstrates Very of of this how one ahead exceptional initial talent target only were first X power that remember target also big of our achievement. XXX billion We

and one advisory, lows represent low cyclical, X, improved trailing across of Page a slide, are on time. for are sum the you of revenues XX-year On conservative each this it's the revenues every firm. much gray, the the can ever durability together of at unlikely believe shown baseline this this businesses more that same We a namely considered all the businesses all these see underwriting which Putting how we've the measurement point very would is because intermediation. that of hit in

in a happened. it the fact, public of all since we years In became has company, never

revenues you blue, which management private other well in banking and dark have at CAGR the from and since as as more fees In can aggregate grown financing XXXX. see XX% durable lending,

in our revenues over in scaled to firm. generate our two with we of the the components our of market On our The streams, franchise across together, franchise. demonstrate XXXX. revenue of that, up increase upside, upside durable Taken generating revenue consistently make because diversification top these environments coupled of different the diversified and baseline of power and consistent ability capture more XX%

in leadership with a we priorities of which our on our our and values X. team strategic strengths, firm's time highlighted the realigning Page vision, focus, our strategic Narrowing spent XXXX our amount significant

talk many of us these starting heard objectives. elements You've about strategic before, with our

to Goldman with invest and our serve to excellence; differentiated and clients the Sachs world-class One third, businesses; harness second, scale. run operate First, to durable at

these of execution continue them. our our objectives. strategic culture, focus it's investing to desired in solving our clients' people, All see outcomes. you and with these As people Taking consequential for will objectives culture in unique execution XXXX and excellence that are critical supported on example, one in in focus by and quality collaboration can our imperative result problem, in invest exceptional aligned we our of is our areas and most the areas page,

We continue generate clients, to return. and and our adviser choice mid-teens people the trusted to returns total to for to be through strong an a shareholder employer be our cycle of

Sachs, to achieved I that have for our about continue our to with Goldman we to XXXX. serve stronger simplified we XXXX, the everything a and in for continue deliver ability of much coupled and With shareholders. excellence clients we clear with future our strategy, feel platform confident will very

turn to financial to over results. I will Denis now it our cover

morning. Good David. you, Thank

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

items the and earnings As We impact percentage $X.X slide. In well special these this ROE per as on David FDIC points. by X.X aggregate, billion, earnings significant our in the highlighted, impact decisions the strategic narrowing provide focus. reduced related we the these $X.XX of to details net progress year financial by share as fees on full assessment year our by made

Markets decline starting performance of as the for fourth X% Global by by business, versus banking decline FICC and a down very investment & billion investment the fell equities Banking quarter, were on than a fees offset versus $XX XXXX. revenues higher in strong to year, by driven advisory fees more $X.X year-over-year, revenues generated year. quarter XX. a of Page banking billion Turning In in XX% revenues last in revenues

For league debt and in and equity-related underwriting. table completed high-yield ranked announced in we well equity XXXX, and our second underwriting maintained position #X as as in M&A

a quarter-on-quarter, backlog rose Our significant increase driven in by advisory.

corporate our are markets there year, only in have with and two of Europe. solid client David the the weeks level the of base. activity encouraged U.S. mentioned, we dialogues new levels into we're As been both though And robust capital by

a $X.X FICC in billion in the net and strong lower were down amid quarter, financing, $X.X of In revenues rates continued quarter, revenues to revenues activity The year-over-year intermediation $X XXXX, revenues client better year average $XXX revenues in FICC million. rose higher Equities, Across Equities consistent results to was with were other on performance in Financing rose balances. year-on-year. in our the up year-over-year & in by FICC billion with increase last financing. billion record priority XX% XX% products. revenues macro net driven derivatives. financing from grow rose XX% strength

Management Moving Page to Asset Wealth on & XX.

rose increase revenues higher billion, including from net and to of revenues year-over-year year fees this a the of X% $X.X $X.X and and as item sale management fourth were in private were year. year-over-year. investment PFM in modest the management our and billion offset management billion last gains XXXX, Fourth other driven our billion fees portfolio PFM. notwithstanding Full X% of decline XXXX, the us For $XX.X fees of track year-over-year and losses an included gain fees. up $XX other hit revenues durable line public of other record also lending produced more versus quarter of million, Equity target equity revenues, and putting banking incentive million sale business. quarter our of $XXX in in revenues in investments a $XXX in on Results by record

and fixed Page on quarter firm-wide and by net quarter appreciation Moving assets, assets XXth as ended XX. inflows driven under $X.X the at of our representing long-term alternative inflows. Total income well net supervision across market record fee-based consecutive trillion, strong a to as

XX under fundraising the billion other the for quarter, year. $XXX fourth supervision $XX our billion of for billion end to billion third-party fees Turning Alternative assets the the for at billion the target on totaled alternatives. XXXX. Page in $XX $X management Gross for $XXX million and was surpassing quarter and year, quarter the for driving and $X.X

$XXX over mentioned, XXXX David fundraising As billion. Day at since our Investor third-party stands now

of billion, On-balance over which sheet reductions to $X we related the approximately $XX totaled $X $XX roughly positions, the $XX principal investment investments across bringing by portfolio our billion to billion. is of alternative billion, reduced this billion including CIEs sales portfolio. historical fourth of XX In quarter, over year for

portfolio exiting we this XXXX to XXXX. don't in focus the at though to pace medium the term, in continue expect be as portfolio over same on We reductions

XX. to year-over-year turn up results on net were Platform revenues up XX% amid of now revenues I'll XX% Solutions versus billion, in $X.X XXXX. Full higher card growth were on $XXX average platform credit consumer Page Quarterly year balances. million

mentioned, regarding credit program a another General approximately for As their to to release card Motors David $XXX reached we of reserves sale of loan agreement transition to loss impact and issuer, with to an move the loans million. held the which the associated was process

at We card credit no additional have this partnerships time. updates regarding our

increase an activities. fourth funding Page was interest On third XX, net in down supporting the Firmwide costs quarter relative of the trading to reflecting $X.X XX% quarter, in billion income

end third the billion, October. quarter increase lending, which other Bank's Signature of an pools $XXX at we in in reflecting facilities won an was portfolio versus loan quarter, total modestly includes call capital the auction higher collateralized Our

GM credit release provision relation In balance by for partially was were provisions net $XXX the I offset reserve growth, Our to losses and mentioned. consumer seasonal million. charge-offs driven by our portfolio,

related by For with line were half were in impairments generally to provisions the last with quarters portfolio, our wholesale two CRE. driven that roughly

Let's on billion. $XX.X turn operating XX. expenses were for Page the to Total year expenses

of for amidst million, remains year-over-year, $XXX the Excluding expense severance-related costs as performance was and competitive. solid compensation flat core talent market

our $XXX million. non-comp efficiencies, talent. run our allowed driven expenses in continue the year-over-year $XXX included were of to the impairments of in achieved and The $XXX fourth CIE fee increase of rate was noncompensation we of investing million. payroll billion, special million As Quarterly quarter, assessment us goal in $X.X by which expenses FDIC

tax XXXX for was effective Our XX.X%. rate

For expect to XX% tax XXXX, we a rate XX%. of

capital Turning on Slide to XX.

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

in our buybacks, We the to to return, sustainably reproposed our and expect remain capital dividend, form returning supporting respect with nimble client rule, capital the are attractive. uncertainty deployment to Basel unchanged. when the philosophy we growing around valuation ongoing While opportunities, prioritize management of particularly given is shareholders excess levels

our solid progress strategic stronger In focus in driving platform conclusion, narrowing execution we with a for much made our XXXX on XXXX.

strategic well core Our best-in-class businesses are positioned to execute our objectives. on

our world-class continue will Sachs and to clients to operate durable and We serve with to scale. excellence, businesses at run differentiated harness our One businesses Goldman invest

of focus the the XXXX for people Additionally, delivering drive our and areas for our help execution shareholders. will we've identified outcomes us clients,

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

Evercore. We'll a Ladies the will take Schorr you. Q&A Glenn to gentlemen, to Thank and with [Operator we moment Instructions] roster. compile first go

investment banking. reality green So I get but wanted rightfully you've to on in mark-to-market, becoming optimistic cautious, a shoots been

saw You quarter. some definitely fourth momentum in the

maybe the just and differentiate you're that on mark-to-market you're is sponsor seeing the versus corporate get what -- mentioned so between curious up quarter-on-quarter, side pipeline on the just feeling. and you side So how

just been Glenn. markets pretty Sure, Sure. have that way activity mean the position, a and and given at level, there's got optimistic base I depressed. capital levels the no firm we've these question M&A I'm

and year, to year, we think this in As year second that improvement. see half the of on really I've year don't on said I continues before, started real

is that of I backlog we means and fourth to I think we've up M&A highlighted, up in $X and Denis If it's revenue. the And billion that know As then just we replace worth quarter. but saw got the stating, a the backlog is put billion $X strong put have really M&A the I plus replenishment growing, obvious, this highlight, improvement growth.

level that's replenishment. has very, And the it our strategic and definitely very would so a strong we're I And say dialogue seeing just of increased, across platform.

done across and XX-year of for but see and to think it's I'm the activity, see you're away, a going thinking improved. some encouraged IPOs people not do to capital by about more come the that it right and takes has are I equity I'm XXXX, At had running to of say more of lot going just time, start markets reality meaningful period the a out more debt capital and activity. engagement. of but and structures they've market, we their materially end issue funding accept day, got in them we're that seeing back the to averages through.

look So the it when There's going on broadly, world. feels a better. I lot in

of that to the of XX% And so about things think be time, risk a manager one go always X% worry the jobs is wrong. I and our can of

to of way levered But of the it take a to going the it. to incredibly pickup is feels this I'd is well do firm. overall I better, think terms we're continue firm in cautious So and view the the frame operation

just the of overall. Maybe cool. in that for Goldman us note. right, mentioned, part wealth the All improvement important on-balance as and investments, ROE an follow-up you is sheet a Reducing on for

that So sheet to think, I investments with it slower rid said, the markets pipelines price? when better, at the of of balance are on-balance how right get sheet all higher, intent, come of reduction might is this the the year, be

of made we've year. last a progress I -- think all, lot of I Yes. first

think given the what you And meaningful, so environment. we what accomplished, pretty look if year at was accomplished we I last especially

monetize happened some is -- One we of pulled XXXX to stuff that forward XXXX. in that the we things expect into didn't

as that focus be to to quickly our get clear, is to And so X possible. as

we to sure that. My guess we've make that is that than target firm inside doing as operating you're want next that set but business, you're a quicker operating focus you We if enormous on a clear we as X get that quickly appropriately. reducing feel to X. and in years good this we If possible, shot got the executed over to expectations manage

Bank We'll Poonawala America. to of Ebrahim go next with

I business. the just some wanted on to time spend FICC

numbers, feels pre-COVID just most were I'm right back back like looking levels to looking XQ XX, the now unpack FICC seems can So it of at if products at if does it, unlike to Maybe you provide 'XX. -- improvement if can it like quite we you of If revenues are piece go just both the perspective some here? perspective see trough that intermediation there. Give from around to like should some and FICC FICC, feel are us seasonality, in some we close weak. you does Slide

at this quarter, I particularly Sure. high intermediation what quiet back and would a was the are half of activity the late level, clients kind say I November December, and quiet. in mean of quarter,

If you the look The the numbers the I and say the have don't me, back is don't to fair I were whole during I it's in of levels. activity levels overall 'XX don't it's at think fair front year whole year, to -- year. but down think up

our When We are a it. diversified business. have clients we active, on big execute

We it quiet to don't continue which terms to make of pace. intermediation. expect durable, half at overall the revenues, continue I but grow more in quarter, it the it that financing a particularly was back

on more in the that seeing comments as in know, opening, the the Denis' watch can and think the environment. based in activity you I year. weeks But particularly we're it. activity, up in first move on And going few segment macro down that what's of we'll

Got just & or Equities. to it. sticking both FICC Maybe FICC maybe

mind year financing next medium over to On over term? us grow if opportunity the reminding the the or you don't side, of financing the

thanks, So Ebrahim.

over that us. focus dovetails share. clients on it's years financing, FICC with last we & our for our market and It opportunities grow focus to clear on been well virtuous see and activity several the So we've a Equities both

clients overall. leading and lot Equities. of see lot have deploy space us & We now both demand of FICC we franchise We have into equities from a to for a this in expertise

clients business Our and we at with and equities we clients and has to see platform. leadership continue existing is in that to scale. position onto our opportunities the the financing bring It activities a significantly, grown new increase do

XXXX look into XXXX. out and we So

We continue to very be focused.

Equities FICC think & in across both there's I opportunities good financing GBM.

go UBS. Brennan to Hawken Hawken? next with We'll Mr.

Sorry about that.

the should be an Apple about us maybe So how provide that ongoing potential relationship. is know flow around help impact you that impact there could thing, could thinking the the that think curious I we about about exit just that it's anything through? from might but

credit we've stated. Denis partnerships card said updates no the other other he in comments, his got what than on

with XXXX and We to the on continue them work and make serve be we progress. in to the will less. continue customers to materially with our partnership, Apple drag to the And partnership from reduce good continue a to drag

when played beta definitely Marcus, pretty And you of your has seems that. and adjusted consumer about out your how have Appreciate adjust matured? to still the versus on talked your base Or that decile plans the the on a as spot been well. platform, then be top think front have What goal? to has deposit expectations? And bright Is worked around, deposit that's about that that any do Okay. product. been you for you the in that has payouts has Or the wanting to thoughts platform earlier views? the

for you Thank Brennan. Sure, question. that

Our us grow of real has overall terms platform. higher advantage that did out to pricing maintain, Marcus the We to been the deposit balances firm-wide sustain at set our to strategic strategy pricing our of across end a platform set envelope and funding. in a

point. to We our not would focus into strategic deposits the XXXX, say, billion this various deposit just at mix. across overall channels our just strategy up we our over were adjusted on and about $XX be continue I Marcus. year, And the we saw across year. growth good channels haven't move on driving We funding Overall, strategic growth last thoughtful funding as

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

had ROE desired X%, you at XX%, that's in started executing it's And you not so off a of or throw year some of an of XX% the David, the if charges, we the saying and really XXXX that execution. your year that's return. was call and when

that of core could term? you waterfall can kind XX% you And in define a get you ROE XX%? give words us So medium chart from if on to how

Sure.

wasn't focused environment our the for Mike. very A And it. It obviously, question, core appreciate business. we're on an So I

B when In even think don't levels overall. was it low that I banking impact is operating at an fact, investment is environment

think do B+ of fully a look or I core basis an which our allocated environment, given this banking business was and of portion significant it do the that very on to had the it's and a ROE. is environment, which in A markets, a firm investment banking at know activity, a not important XX%

We continue that that, a the business. through to believe business cycle mid-teens is

going And well. and so the -- I we've think level at, have don't that we see we're activities been to at of stay very that business positioned

And environment. so you'll there some returns get upside a in better

And drive mid-teens Management, Asset balance progress. to we've clear on sheet & then returns The are been margin. Wealth returns, We're we we a Management Asset continue balance I We're reduce drag sheet been the on with that that journey. XX% has with smaller Wealth sheet. secondarily, can but better a & on the a balance pretty to think making

I think years. X we'll the next over make very good progress

majority vast won't those materially And been. the doesn't firm, mean reduced they vast, mid-teens. That the the reduced will XXXX businesses, think behind a year. there of but I We it's the significantly and lot can that's what look us it in this in drags. two at if drag from of platforms We've other anything, you from be be operate got

provided next over of think couple we're in making a the years, I so And terms it's the reasonable environment. progress medium that good

X next you'll progress on And so see I the to positioning years. the over X good firm of think overall the

to up. And just follow then

than also you Solutions, other lot it little relates dimension The can from would as be and disposition investments, stock a that so less much? Platform you the markets XXXX principal to bit? help do higher said And the drag or not a

when when no I they They in last on terms of at smaller do. headwinds disposition. we XXXX. we've have I that, sheet that years, real the sheet look help There's more balance much also X in question. -- a against the mean balance the revenue could improve, had absolutely but markets you of

a With reducing market, might broadly. on we're actually revenue But to that some have benefit performance. better focused you

as in the on have platforms GM you for close to more now You move we see, sale. to transparency GreenSky, held continue

drag that. performance. provide And When We will will so specific more more on XXXX. overall we on it. the have small color we're and reduced the you But significantly in the providing transparency context firm comfortable of firm's think that, in the be

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

kind environment David of investment other trading of probably know lot go and you trading I'm support conditions some a interplay a recovery also assuming well. pick need in to intermediation. assumptions Denis, the if then And I a in question investment that versus areas which here. of of between on just And But about macro kind banking think areas down, with as up maybe settling down. could banking, slow likely would could there's

trading just same to easier? ex investment can of banking kind revenues love bit there, the you've you the what time? financing about kind really takes, maybe historically a little So of and at kind And hear whether key just seen and just puts of the question grow is

Yes.

Devin, question. So the at level, appreciate a high I

the normalize our to is of investment way activity I growing. think And And obviously, continue can growth and world, given we world, time, the will we market size XX, activity the last in the market, if we financing grow the growth in over will our as years, XX given scale you grow continue, activity. of the market investment banking have activity. cap banking our position, the assume we and for

little in market means But activity. When that's a activity slowdown banking on FICC intermediation normalization the in bit some can not or we that be shape countercyclical of a world, find form. same in there's a saying as investment the real disruption way,

certainly going but certain there's it's a think rates. not lot to There's view trajectory world, in rates me. I and of the the on inflation, a on point of

the to how its be as quantitative tightening adjust they I on debates continue active tightening. think it going doesn't the quantitative people on or Fed are about to continues its environment. There's

being in all people this, will so active markets. of think, into to And play I continue

high So this look, think at I is level, a level. a just high do

we I XXXX a environment will But whatever prepared good not businesses feels of and was operate be operate our to environment predictor think in in. mix we're have XXXX. it than to the in I'm it like better for in

quick appreciate I that, Denis. follow-up a Understood. for Maybe David.

the balance Just now. estate, XXXX, big headwind on appreciate in office I commercial only $X disclosure, all a clearly billion their to real sheet

for how the characterize where feel So could more as material sheet and the then And marks? you CRE to historical maybe principal kind of still marks, just think be current of environment broadly, you the on when exit the do company behind you relative balance about just pain the environment expectations there about being kind just marks investments?

we've we've new the progress CRE, And disclosed down the on particular, sheet, you particular, perspective, prior on as impairment on an gave on the obviously of of We Thank positions and the we and then see from course XXXX, positions that a down disclosures loans made and can moved CRE then number sitting both nature recently, calls disclosure know, office from over and have in sector we at Devin. quarters our XX%. made significant disclosure In and as CIE well exposures those the last moving as roughly substantial that progress. balance of on you in of office. you. really marks we're Sure, the the couple

right the XXXX activity the the visibility that, sits we that that think matter, that portfolio that over had and based broader the course for we the and portfolio that at we on of had So place.

further very we focused that into activity disposition for there on is. remain XXXX, mix of move As opportunities what the be will should and dispositions

the respect our towards of impact to activities long-term mindful forward, addition of in target. franchise was reviewing sell-down HPI We're to are. also on David When our the what sell-down those expectations moving medium-term with

So you have we to for may just why cautioned on a sense pace. give

hope very exit where of in those long-term of refinancing To will franchise, those exposures lender that And credit as supporter the a surrender much would potential we a the a we we of meaningful remain position of clients. incumbency our and some incumbency. for a have We position. be advance to benefit positions enjoy

in And clients continuing thoughtful reduce that process. we so being third-party the while grow supporting risk fund can while to the to business so management continue we're our

with Stanley. Kenny We'll go next to Ryan Morgan

highlighted that alternatives. and surpassed So your prepared target Goldman you in remarks fundraising the

on any update grow credit, can be about how look your color franchises particularly wealth we be should big as DCM you strategy that you your private maybe in credit? to it private would expect complements in we so get some And Any forward, and more risks how thinking on helpful. and to give

about question. something the on. feel I We we've appreciate good the Ryan, progress Sure. made. obviously very, focused we're It's fundraising very

you when We expect could operate of in another alternatives. do to XXXX, private on you credit. obviously very to raise $XX credit. scale in look us private think focused billion I forward $XX at billion We're

billion $XXX over of have credit. We private

the to a in we for given the I credit, our have and especially gives the positioned unique business franchise advantage. continue and connection a think platform way is us banking But opportunity our to broad us unique origination with private grow scale and competitive

to focus. we're to this going So continue keep

goal. our It stop met we because doesn't

meant team to in to continue X.X of a some that on frame broad Our the and within XXXX, us the are funds the over market John set to we'll invest big money both lot opportunity raise continuing allocators to with to goal division ago, year-to-year myself, be continue partnerships the with basis, and base those and and see was years world the we're relationships. Waldron in you'll but that got the big and Asset going all across capital we've Management our time a spending client build

And Endgame letters today. due then Basel are comment

cycle now have the adapt final you if you Goldman time to that ROTCE XX% the how us to might might through plan how potential rule digest proposal, to impact update had and comes on as give written G-SIBs the and XX% proposal through target? your could So other an

the today it's I the process. Well, not what end period certainly of would comment the Sure. marks say, end of obviously, and the

would of the end it's the of say process. the I beginning fact, In

with to moving set with the continue regulators given and stakeholders, so of highly proposed phase engaged significant our and broad next And government be we're the concern the into rules.

You'll comment from letters peers. see our us, from

You'll ability capital see companies, corporates, insurance affect letters how end their this access particularly their ensure the rule also users, in including many risk pension are concerned could mitigate to their who and about funds, business. from and

also, in that rooted felt the of would competitive from industry, disadvantages really think I be changes the this the a U.S. perspective. magnitude is beyond I these well banking the fact and think, And proposed

there pretty So of the as it impact rule, speculating withdrawn my think reproposed. rule proposed and and view to I case I that's be proposed. going They're is is that out listening carefully. as should don't the at a the proposed, a not view to on there the there's significant anyone think looking base forward feedback that Fed is taking the is don't think and I in is this appropriately, be clear, move

certain also We're activity businesses pricing businesses rules said or I've certain to adapt. put place, If adjust very of the as capital, flexible and changes our with we'll before. in

is to nimble. to we to talk of place what once in I it's can speculate think about be flexibility, and time, we'll any a over premature. we've is idea have world proven the like going got as we look before particularly this capital we've But how lot

focus. And so to continue we'll

next to Fannon with Jefferies. go Dan We'll

As all the as year -- you of XXXX? maybe reasonable you growth the efficiency think your expense investment areas one-timers targets, of about this we about excluding are what's and for what obviously level think noncomp a priorities -- when

Dan. Thanks,

are the So efficiency we ratio on. is laser-focused something

orient We towards our the continue drive target. to to XX% firm

selected mean, you have number. of over the like the XX%. impact impact it would XXXX, obviously but the better the the mentioned items. to You significantly than want of fully we where been reported course I if more not ratio efficiency be, That's take

the number We rigorously have structured end year, expense. process the execution marking once our to the plan last had market after of the and it firm to over put implemented noncompensation at We a across course against very business it, targets as year. efficiency we process category we and continue get of some initiatives our expense, of our a out thinking efficiently things benchmarking possible. about structures, There's every a in categories. as that the processes, expense We're governance, we our of each of have reviewing to noncompensation incentive we to the do -- reviewing drive of of ton that our can a different KPIs,

impact of mitigate possible. as across manage we And inflation for impacts activities. closely it's the an that and it implement these reason as need see processes to do those that types of to We

into we think maintaining XXXX, -- on overall the look repeat expect don't very, types our spend. I very, and items, as we at noncomp expense activities disclosure very if selected you very focused those to remain take we'll around look of be a

our same efficiency of variable forward are compensation the within And on expect a pay-for-performance our performance-based into of expense. variable. this expense. number other obviously you we the And expense are component There that should the and with overall XXXX. size a course our also That is maintained items is how base to of and of the the obviously that you saw ratio other year. orientation over respect that, component We

both well expenses largest as Our are items, compensation as transaction variable.

determine are base So activities and see into we efficiency to mix on and unfold ultimately land ratio. of our how will activities have XXXX expense aggregate where of the types we to what an an the

Wealth Management. follow-up And Great. on

You channel. disclosed from XX% the XXXX since alternative of come inflows have the Wealth

Just in time how you and as just the -- view does curious if that level externally, of the also Sachs, the Goldman sustainable. that in period to revenues? difference Wealth economics between that that how differs it was whether consistent contribution that throughout And XX% and XX% what's

highlights been between this looks Asset channels the investment, other alternative Wealth we've level, over that grown Management over retail, or raising wealth, wealth, the a Asset business, of and & the that -- Management base comment it cetera. period, initial what like has business, is the X period high years that at third-party Well, et mix client institutional past our

from most go Private of we XX% we manage the for When channel you Wealth Private you look if much back XX fundraising of these higher -- Wealth. years, the was than at money our strategy, and from our our activities Dan, percentage came

decrease, pension going as community historically speculate go. to funding partnerships but institutional in we Wealth not lot in So it wealth had funding, the not I'm continue raised to will where where sovereign of a the alternative percentage that areas, invest broad we exactly community, of will probably

and allocate business you all as scale, economics the partnership definitely that's that's know, for somebody attractive that been proposition billion, in giving million in or than And time. a And But have partnerships. a you with $XX these enter attractive. exactly all identical. consistent channel long, long and allocate million. our or a they're attractive They're extremely Private alternatives you associated different Wealth $XXX in think At with the the people institutional economic they're are I not $XX

continuing business. So the to we're scale

We for have real the business. margin targets

we'll scale good to I and think continue Goldman we've distribution of using our of make and the of these for Sachs still stages the early platform got cement invest lots Management we're & channels Wealth in progress. confident broad and Asset the of to benefit opportunities, platform, I'm

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

on obviously on into capital capital do the But if top discussed banking in touch on continuing consume all You're just banking in and is comes about pretty just banking depending buybacks solid in intensive, the as bolt-on how obviously financing, capital. which lean were think the There's was how obviously, deals term, then And near on 'XX. and allocation? uncertainty interest back, then ending you to earlier. which

increased why the the environments, client been there's said X to primary of very, of capital. I'll big amount that's we've over the relative reasons years. allocate last can & a support We've Markets capital it's We've the on clients, start franchises And is our basis activity in way client the some Denis our comments. our sure to our our the our can always we of we Banking where that performed I broad base franchise, course think allocated focus and on focused has add financial to the when making performed on serve Global different very one and well. have resources franchise capital

And will see to our our And to deploy with degree that's At earnings. capital generate think being evolve. planning conservative very, with I taking shareholders. think opportunities from although, it of to that of program. we're moment, that, to record the given just nimble we long we our have see deploy. posture will continue the we to around of deploy that's around also very Where again, Basel III I a to uncertainty capital Endgame, in to more we broad track it lot clients, opportunities, there, return we continue a some ability capital the don't going We do and a

capital, position, you've dividend, continue generate right we we capital making we've serve growing in to And our the clients. very and we to to on capital to been focused, on continue And seen sure we'll have as as to we've So that. confidence our return we're got going shareholders. plan resources do focus to the

of in up of those the there principal investments following And sheet some the time? exit opportunity is then on goes as expense away on reduction legacy balance over just separately, infrastructure investment, an

on leverage lots a improve. to which and story, an When Wealth & see scale sheet operating and There's traditional platform. differently Asset will business our of a is the those lots we and were in on-balance than why with running business need the would continue reasons someone sheet manage alternative Management you an margin that position, serve to balance of one people management on business those you that fund creates that business positions else's positions the of number lots

balance in we're went our last sheet. to early do a journey, years just We out example. so I'll ago and used simple raised year, equity And on We the that give business first X.X fund. growth

second service to We but the you need of the team increase and very, you raise go team. very and don't fund, first to lots We that fund, you have lots that. and when raised a We our scale team of positions therefore, smaller to manage broad needed your fund.

And real that's part over leverage, operating and & story our margin improvement Asset so of in Wealth there's Management time.

it's balance operating because answer improvement this not of massive we story, So to firm. from leverage a overstate is yes. place and continue the the as it we but move fund have I sheet is want to don't part a some into

We'll go RBC. next to Gerard Cassidy with

the identified relationships years, David, your the and or in Equities but FICC that's think clients, top it prepared in about over hallmark been Slide that about Equities X you with X business. growth last for were remarks, XXX the or guys and success, X, & & talking a in real those that that financing you FICC I contributed David, -- to the the growing you success X was

around. Suisse, a But the Is you the first your as all well of more no put little longer what and of could you color us competition? success? Credit or additional capital more than if that in is that the with down hiring us share what's been competitors, Can the some business and challenged you has on give competition it people as Is course, the attributed driving just dig folks of into to success? business,

business point Gerard. that does those business, firms that's level, scale start being a the privileged of to that businesses of a at is really things, the one be baseline. happen and a important I'd the to high of with of couple operate Sure, think fact I'd we just position a to And At but in handful scale. I

a are of handful think we've I there But well. things that done

these out, First, come different in One silos with historically, lot client of firm, They clients GS and to One back talked do listened about back different the to places we would a went much experiences. into wanted in how you and feedback. their a ethos, these much operated we really One goes we firm experience them, businesses more clients time, thinking and really if and GS as broad XXXX we experience with the partner. to partner, get the less to and go firm this coordination across deal And spent we

integrated in ethos an because improved and approach that's their partner-like One clients very with through made wallet share. experience. improved we've GS with they progress our improved these their business think I dealing that that's it's experience, us, large more therefore, in and in this real feel And

have you other them. things same need through want economically the way aren't sometimes activities, get banking help also to become Secondarily, And there. three, we take activities. our their with be we ecosystem. the with a ways to with we've view, to of that you that clients when They really a transacting their much long-term attractive, long number in And approach a for tried bigger financer finance investment we very rewarded

that, you attractive. wind are you opportunities If up you more do getting that do that consistently,

shares. our with those think look I when really at helped we so And wallet us three scale combined things platform have our

serve excellence. people in adjustments feedback. of the for business, running a spend that these make lot the make is One and real time from a their Denis to things of feedback, how with lot to up, as our ethos focused presentation allows we And and John really that saw continue our And we're the can clients sure I what trying one us spend tenet take continue to of It's talking of on put and GS with operating clients to them to that to we We we excellence too, big, time, addition distinction. as big asking a we'll serve the do. you we're to

year. comments in you've and ECM this be your talked about about Can little Very flavor I the other is the to and a Americas? you we know pipelines are what give able the a you're force, it Asia? you on it areas of also the see good. since global then Is what And us might seeing of Europe? parts Is obviously what globe best Or -- parts potential? it the

the scale. the are of And of it's resilience proportionally more But level. particularly given just activity pickup is Americas material U.S. biggest economy, I the dialogue. seeing Well, think a Europe, activity across the other seen that's The part you've strategic places. we than there broader

the side. But slower capital I level, I'd is Asia there say those both nature are just the market comments the Gerard. and the that it are respect slower, to and And positioned, things that is seems think obviously one place where with given of high M&A side make in activity still economic where China. a

you. insights. the appreciate Always you. Thank Thank

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

maybe in you you to reported the And different we as about questions whether that's public to look for should the at some looks just and margins. that items XXs. try to the appropriate to core wanted figure ask items, operating off, least to off ahead hoping somewhere us the XX% point reconcile down be the upper about was efficiency of the can maybe adjusted 'XX? jumping the figure like various thinking And I I help disclosure, and couple get to in XX% Denis, in mid-XXs. versus that we of So adjusted When ratio just the at noted leverage comp efficiency it set adjust we a start

question, the Steven, from I a indicated for on say, think attract And the as jumping the Certain I'd I our of other that prior of be we a of comes expenses as we evolves So as of is degrees to prosecute good the have mindful XXXX. point different the transaction-based there, XX% business activities. firm. activities mix ultimately business and those into off

We'll mix to looks so And and obviously, business mindful of be activities be mindful, magnitude forward to have scale is XXXX. roll like. the we'll we what the ultimate what the have in ultimate as of

you the on basis. of roughly disclosure, the compensation flat was think I our noticed equation, on a year-over-year that side

and were PCL make revenues in we're observed of net position talent we with of that in a year to up more for was significant we and the X%, as year look of a our Our compensation that have clients activity sure thought activity, and roughly optimism see. bit of in we the that our deliver core place 'XX businesses want performance that types We forward what to solid we could execution a we had flat. for the we that into

balance repeat and degree of area the items the those we of assessment. manage In manage items carefully one special activities most and of pretty potential, continue exit one-off as sheet the terms discussed. down selected get to of CIEs to on handle trying the associated on with continue FDIC The is to are as discrete a we'll the we've

revenues for Street. increase is to million. about only just That's billion The to It you year on great. comp grow Denis, the And expected relating The the a comp for this about expectation made, are leverage, for just looks specifically. $X to follow-up dollars $XXX comments like

or marginal of do incremental You track strong a good margins. have delivering record leverage operating

to from? come just leverage, were that the is going comp thinking the on you're incremental a growth for well But fact alluding expectation you about pay should we realistic XX% going appropriately going an talent people compensate revenue to wanted you're I that execute where margin get and platform, a to be is given how ultimately sense, to comp the to given

make deliver platform. to Steven, make David pay-per-performance. well. things to of attract on people operating it's and And driving mantra exceptional We're such our enables for also across as to one our one I'll on It's the clients. very We're another focused leverage expect, that driving true scale meanwhile, the comment. us platform. and the of wants focused across our a staying talent what we're excellence

appropriate The is come mindful the are to ultimate performance clients XXXX talent and delivering ultimate driving for down to leverage results reflect results the of the amount to as well those what retention, relative to feel what compensation being really activities in of team of as of going compensation mix are of payout the and we shareholders. the service operating

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

I you're on was Is Bayo, outside Lead firm for? looking currently, your the need just got do wondering guess, I the the person a Goldman I going longer someone Director, director. guess Independent who someone purchased you new of and from to his Board, is about lead no that from Sachs, now type to Board get what Board what is

I So the appreciate question, Mike.

business end the Lead in Bayo the still is Director. last at sometime highlight, Lead That week, won't is quarter. the close until of you BlackRock. third Bayo the As his sold Director. or deal Bayo fourth to

process place. We in have a governance

appropriate to and has transition. we'll at announcement met as the time, Our make Board the

is create than the manage point, Bayo orderly will an the other Lead other a in I we'll Director, than nothing But no to say sale, transition and transition. still fact and surprises. at because have the process this that of more it the

Okay.

So for would of You Sachs currently consider what? Goldman that or? people outside

adding it. our We comments not answer the make governance about happy we're the to I'll process to and Board at people talk that I'm looks this Mike. transition. announced to But make action. I'm going a forward to Board, questions not and Board going our takes about clear our Well, time always be at comments.

The this for time, Call. and Conference you gentlemen, this there Ladies additional Quarter Thank At XXXX no Earnings queue. participation. in Fourth concludes are Goldman Sachs questions your

now may disconnect You