UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
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CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| Date of Report (Date of earliest event reported): | ||
(Exact name of registrant as specified in its charter)
Commission File Number:
| (State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) | |
| (Address of principal executive offices) | (Zip Code) | |
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol |
Exchange on which registered | ||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On October 17, 2023, The Goldman Sachs Group, Inc. (Group Inc. and, together with its consolidated subsidiaries, the firm) reported its earnings for the third quarter ended September 30, 2023. A copy of Group Inc.’s press release containing this information is attached as Exhibit 99.1 to this Report on Form 8-K and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On October 17, 2023, at 9:30 a.m. (ET), the firm will hold a conference call to discuss the firm’s financial results, outlook and related matters. A copy of the presentation for the conference call is attached as Exhibit 99.2 to this Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| 99.1 |
The quotation on page 1 of Exhibit 99.1 and the information under the caption “Highlights” on the following page (Excluded Sections) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (Exchange Act) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Group Inc. under the Securities Act of 1933 or the Exchange Act. The information included in Exhibit 99.1, other than in the Excluded Sections, shall be deemed “filed” for purposes of the Exchange Act.
| 99.2 | Presentation of Group Inc. dated October 17, 2023, for the conference call on October 17, 2023. |
Exhibit 99.2 is being furnished pursuant to Item 7.01 of Form 8-K and the information included therein shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of Group Inc. under the Securities Act of 1933 or the Exchange Act.
| 101 | Pursuant to Rule 406 of Regulation S-T, the cover page information is formatted in iXBRL (Inline eXtensible Business Reporting Language). |
| 104 | Cover Page Interactive Data File (formatted in iXBRL in Exhibit 101). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| THE GOLDMAN SACHS GROUP, INC. |
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| (Registrant) |
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| Date: October 17, 2023 |
By: |
/s/ Denis P. Coleman III |
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| Name: Denis P. Coleman III |
||||||||||
| Title: Chief Financial Officer |
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Exhibit 99.1
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Third Quarter 2023
Earnings Results
Media Relations: Tony Fratto 212-902-5400 Investor Relations: Carey Halio 212-902-0300
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The Goldman Sachs Group, Inc. 200 West Street | New York, NY 10282
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Third Quarter 2023 Earnings Results
Goldman Sachs Reports Third Quarter Earnings Per Common Share of $5.47
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“We continue to make significant progress executing on our strategic priorities and we’re confident that the work we’re doing now provides us a much stronger platform for 2024. I also expect a continued recovery in both capital markets and strategic activity if conditions remain conducive. As the leader in M&A advisory and equity underwriting, a resurgence in activity will undoubtedly be a tailwind for Goldman Sachs.” |
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- David Solomon, Chairman and Chief Executive Officer
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Financial Summary
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Net Revenues
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Net Earnings
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EPS
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3Q23 $11.82 billion
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3Q23 $2.06 billion
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3Q23 $5.47
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3Q23 YTD $34.94 billion
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3Q23 YTD $6.51 billion
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3Q23 YTD $17.39
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Annualized ROE1
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Annualized ROTE1
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Book Value Per Share
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3Q23 7.1%
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3Q23 7.7%
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3Q23 $313.83
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3Q23 YTD 7.6%
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3Q23 YTD 8.2%
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YTD Growth 3.4%
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NEW YORK, October 17, 2023 – The Goldman Sachs Group, Inc. (NYSE: GS) today reported net revenues of $11.82 billion and net earnings of $2.06 billion for the third quarter ended September 30, 2023. Net revenues were $34.94 billion and net earnings were $6.51 billion for the first nine months of 2023.
Diluted earnings per common share (EPS) was $5.47 for the third quarter of 2023 compared with $8.25 for the third quarter of 2022 and $3.08 for the second quarter of 2023, and was $17.39 for the first nine months of 2023 compared with $26.71 for the first nine months of 2022.
Annualized return on average common shareholders’ equity (ROE)1 was 7.1% for the third quarter of 2023 and 7.6% for the first nine months of 2023. Annualized return on average tangible common shareholders’ equity (ROTE)1 was 7.7% for the third quarter of 2023 and 8.2% for the first nine months of 2023.
1
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
Highlights
| ◾ | Global Banking & Markets generated quarterly net revenues of $8.01 billion, driven by strong performances in both Fixed Income, Currency and Commodities (FICC), which included record quarterly net revenues in financing, and Equities. |
| ◾ | The firm ranked #1 in worldwide announced and completed mergers and acquisitions, equity and equity-related offerings, and common stock offerings for the year-to-date.2 |
| ◾ | Asset & Wealth Management generated quarterly net revenues of $3.23 billion, including record Management and other fees. Assets under supervision3,4 ended the quarter at $2.68 trillion. |
| ◾ | Platform Solutions generated quarterly net revenues of $578 million, 53% higher than the amount in the prior year period. |
| ◾ | Book value per common share increased by 1.5% during the quarter and 3.4% during the first nine months of 2023 to $313.83. |
| ◾ | During the quarter, progress was made toward the execution of strategic goals, as the firm announced agreements to sell GreenSky and Personal Financial Management. |
Net Revenues
| Net revenues were $11.82 billion for the third quarter of 2023, essentially unchanged compared with the third quarter of 2022 and 8% higher than the second quarter of 2023. Net revenues compared with the third quarter of 2022 reflected significantly lower net revenues in Asset & Wealth Management, offset by higher net revenues in Global Banking & Markets and Platform Solutions. |
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Net Revenues
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$11.82 billion
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2
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
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Global Banking & Markets |
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| Net revenues in Global Banking & Markets were $8.01 billion for the third quarter of 2023, 6% higher than the third quarter of 2022 and 11% higher than the second quarter of 2023.
Investment banking fees were $1.55 billion, essentially unchanged compared with the third quarter of 2022, due to higher net revenues in Debt underwriting, primarily driven by leveraged finance activity, and higher net revenues in Equity underwriting, primarily from initial public offerings, offset by lower net revenues in Advisory, reflecting a decline in completed mergers and acquisitions transactions. The firm’s Investment banking fees backlog3 was lower compared with both the end of the second quarter of 2023 and the end of 2022.
Net revenues in FICC were $3.38 billion, 6% lower than a strong third quarter of 2022, reflecting lower net revenues in FICC intermediation, driven by significantly lower net revenues in currencies and commodities and lower net revenues in credit products, partially offset by significantly higher net revenues in interest rate products and mortgages. Net revenues in FICC financing increased slightly.
Net revenues in Equities were $2.96 billion, 8% higher than the third quarter of 2022, due to higher net revenues in Equities financing, reflecting significantly higher net revenues in prime financing, partially offset by significantly lower net revenues from portfolio financing, and higher net revenues in Equities intermediation, primarily in derivatives.
Net revenues in Other were $110 million compared with $(329) million for the third quarter of 2022, primarily reflecting significantly lower net losses on hedges and the absence of net mark-downs on acquisition financing activities included in the prior year period. |
Global Banking & Markets
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$8.01 billion
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| Advisory |
$ 831 million | |||
| Equity underwriting |
$ 308 million | |||
| Debt underwriting |
$ 415 million | |||
| Investment banking fees |
$ 1.55 billion | |||
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FICC intermediation |
$ 2.65 billion | |||
| FICC financing |
$ 730 million | |||
| FICC |
$ 3.38 billion | |||
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Equities intermediation |
$ 1.71 billion | |||
| Equities financing |
$ 1.25 billion | |||
| Equities |
$ 2.96 billion | |||
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Other |
$ 110 million | |||
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Asset & Wealth Management |
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| Net revenues in Asset & Wealth Management were $3.23 billion for the third quarter of 2023, 20% lower than the third quarter of 2022 and 6% higher than the second quarter of 2023. The decrease compared with the third quarter of 2022 primarily reflected net losses in Equity investments, partially offset by higher Management and other fees.
Equity investments reflected net losses from investments in private equities, due to net losses from real estate investments and significantly lower net gains from company-specific events, and net losses from investments in public equities, both compared to net gains in the prior year period. The increase in Management and other fees primarily reflected the impact of higher average assets under supervision. Incentive fees were lower, driven by more significant harvesting in the prior year period. Private banking and lending net revenues were slightly higher as the impact of higher deposit balances and spreads was largely offset by the impact of the sale of substantially all of the Marcus loans portfolio earlier in the year. Net revenues in Debt investments were unchanged. |
Asset & Wealth Management
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$3.23 billion
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Management and other fees |
$ 2.41 billion | |||
| Incentive fees |
$ 24 million | |||
| Private banking and lending |
$ 687 million | |||
| Equity investments |
$(212) million | |||
| Debt investments |
$ 326 million | |||
3
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
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Platform Solutions |
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| Net revenues in Platform Solutions were $578 million for the third quarter of 2023, 53% higher than the third quarter of 2022 and 12% lower than the second quarter of 2023. The increase compared with the third quarter of 2022 reflected significantly higher net revenues in Consumer platforms.
The increase in Consumer platforms net revenues primarily reflected significantly higher average credit card balances, partially offset by lower net revenues from the GreenSky loan portfolio, which included a mark-down of $123 million related to the transfer of the portfolio to held for sale (more than offset by a related reserve reduction of $637 million in provision for credit losses). Transaction banking and other net revenues were lower, reflecting lower average deposit balances. |
Platform Solutions
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$578 million
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Consumer platforms |
$501 million | |||||
| Transaction banking and other
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$ 77 million
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Provision for Credit Losses
| Provision for credit losses was $7 million for the third quarter of 2023, compared with $515 million for the third quarter of 2022 and $615 million for the second quarter of 2023. Provisions for the third quarter of 2023 reflected net provisions related to both the credit card portfolio (primarily driven by net charge-offs) and wholesale loans (driven by impairments, partially offset by a reserve reduction based on increased stability in the macroeconomic environment), offset by a net release related to the GreenSky loan portfolio (including a reserve reduction of $637 million related to the transfer of the portfolio to held for sale). Provisions for the third quarter of 2022 primarily reflected consumer portfolio growth, net charge-offs and the impact of continued broad concerns on the macroeconomic outlook. |
Provision for Credit Losses
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$7 million
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Operating Expenses
| Operating expenses were $9.05 billion for the third quarter of 2023, 18% higher than the third quarter of 2022 and 6% higher than the second quarter of 2023. The firm’s efficiency ratio3 was 74.4% for the first nine months of 2023, compared with 62.7% for the first nine months of 2022.
The increase in operating expenses compared with the third quarter of 2022 primarily reflected higher compensation and benefits expenses (reflecting an increase in the quarter in the year-to-date ratio of compensation and benefits to net revenues, net of provision for credit losses, and a reduction in the year-to-date ratio in the prior year period), a write-down of intangibles of $506 million related to GreenSky and impairments of $358 million related to consolidated real estate investments (both in depreciation and amortization). In addition, transaction based expenses were higher.
The ratio of compensation and benefits to net revenues, net of provision for credit losses, was 34.5% for the first nine months of 2023, compared with 34.0% for the first half of 2023.
Net provisions for litigation and regulatory proceedings for the third quarter of 2023 were $15 million compared with $191 million for the third quarter of 2022.
Headcount increased 3% compared with the end of the second quarter of 2023, primarily reflecting the timing of campus hires. |
Operating Expenses | |||||
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$9.05 billion
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YTD Efficiency Ratio | ||||||
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74.4%
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4
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
Provision for Taxes
| The effective income tax rate for the first nine months of 2023 was 23.3%, up from 22.3% for the first half of 2023, primarily due to write-offs of deferred tax assets related to the transfer of GreenSky to held for sale and changes in the geographic mix of earnings. |
YTD Effective Tax Rate
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23.3%
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Other Matters
| ◾ On October 12, 2023, the Board of Directors of The Goldman Sachs Group, Inc. declared a dividend of $2.75 per common share to be paid on December 28, 2023 to common shareholders of record on November 30, 2023.
◾ During the quarter, the firm returned $2.44 billion of capital to common shareholders, including $1.50 billion of common share repurchases (4.2 million shares at an average cost of $354.79) and $937 million of common stock dividends.3
◾ Global core liquid assets3 averaged $406 billion4 for the third quarter of 2023, compared with an average of $410 billion for the second quarter of 2023. |
Declared Quarterly Dividend Per Common Share
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$2.75
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Common Share Repurchases
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4.2 million shares for $1.50 billion
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Average GCLA
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$406 billion
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5
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
The Goldman Sachs Group, Inc. is a leading global financial institution that delivers a broad range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.
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Cautionary Note Regarding Forward-Looking Statements |
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This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts or statements of current conditions, but instead represent only the firm’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the firm’s control. It is possible that the firm’s actual results, financial condition and liquidity may differ, possibly materially, from the anticipated results, financial condition and liquidity in these forward-looking statements. For information about some of the risks and important factors that could affect the firm’s future results, financial condition and liquidity, see “Risk Factors” in Part I, Item 1A of the firm’s Annual Report on Form 10-K for the year ended December 31, 2022.
Information regarding the firm’s assets under supervision, capital ratios, risk-weighted assets, supplementary leverage ratio, balance sheet data, global core liquid assets and VaR consists of preliminary estimates. These estimates are forward-looking statements and are subject to change, possibly materially, as the firm completes its financial statements.
Statements about the firm’s Investment banking fees backlog and future results also may constitute forward-looking statements. Such statements are subject to the risk that transactions may be modified or may not be completed at all, and related net revenues may not be realized or may be materially less than expected. Important factors that could have such a result include, for underwriting transactions, a decline or weakness in general economic conditions, an outbreak or worsening of hostilities, including the escalation or continuation of the war between Russia and Ukraine, continuing volatility in the securities markets or an adverse development with respect to the issuer of the securities and, for financial advisory transactions, a decline in the securities markets, an inability to obtain adequate financing, an adverse development with respect to a party to the transaction or a failure to obtain a required regulatory approval. For information about other important factors that could adversely affect the firm’s Investment banking fees, see “Risk Factors” in Part I, Item 1A of the firm’s Annual Report on Form 10-K for the year ended December 31, 2022.
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Conference Call |
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A conference call to discuss the firm’s financial results, outlook and related matters will be held at 9:30 am (ET). The call will be open to the public. Members of the public who would like to listen to the conference call should dial 1-888-205-6786 (in the U.S.) or 1-323-794-2558 (outside the U.S.) passcode number 7042022. The number should be dialed at least 10 minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast through the Investor Relations section of the firm’s website, www.goldmansachs.com/investor-relations. There is no charge to access the call. For those unable to listen to the live broadcast, a replay will be available on the firm’s website beginning approximately three hours after the event. Please direct any questions regarding obtaining access to the conference call to Goldman Sachs Investor Relations, via e-mail, at [email protected].
6
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
The Goldman Sachs Group, Inc. and Subsidiaries
Segment Net Revenues (unaudited)
$ in millions
| THREE MONTHS ENDED | % CHANGE FROM | |||||||||||||||||||||||
| SEPTEMBER 30, 2023 |
JUNE 30, 2023 |
SEPTEMBER 30, 2022 |
JUNE 30, 2023 |
SEPTEMBER 30, 2022 |
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GLOBAL BANKING & MARKETS
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Advisory
|
$ 831 | $ 645 | $ 972 | 29 % | (15) % | |||||||||||||||||||
| Equity underwriting
|
|
308
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|
338
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|
|
244
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|
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(9)
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|
26
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| Debt underwriting
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415
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448
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|
|
328
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|
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(7)
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|
27 | |||||||||||
| Investment banking fees |
1,554 | 1,431 | 1,544 | 9 | 1 | |||||||||||||||||||
| FICC intermediation
|
|
2,654
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|
|
2,089
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|
|
2,896
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|
|
27
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|
|
(8)
|
| |||||||||
| FICC financing
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730
|
|
|
622
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|
|
721
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|
|
17
|
|
|
1
|
| |||||||||
| FICC |
3,384 | 2,711 | 3,617 | 25 | (6) | |||||||||||||||||||
| Equities intermediation
|
|
1,713
|
|
|
1,533
|
|
|
1,608
|
|
|
12
|
|
|
7
|
| |||||||||
| Equities financing
|
|
1,248
|
|
|
1,433
|
|
|
1,124
|
|
|
(13)
|
|
|
11
|
| |||||||||
| Equities |
2,961 | 2,966 | 2,732 | – | 8 | |||||||||||||||||||
| Other
|
|
110
|
|
|
81
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|
|
(329)
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|
|
36
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|
|
N.M.
|
| |||||||||
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Net revenues
|
|
8,009
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|
|
7,189
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|
|
7,564
|
|
|
11
|
|
|
6
|
| |||||||||
|
ASSET & WEALTH MANAGEMENT
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Management and other fees
|
2,405 | 2,354 | 2,255 | 2 | 7 | |||||||||||||||||||
| Incentive fees
|
|
24
|
|
|
25
|
|
|
56
|
|
|
(4)
|
|
|
(57)
|
| |||||||||
| Private banking and lending
|
|
687
|
|
|
874
|
|
|
675
|
|
|
(21)
|
|
2 | |||||||||||
| Equity investments
|
|
(212)
|
|
|
(403)
|
|
|
721
|
|
|
N.M.
|
|
|
N.M.
|
| |||||||||
| Debt investments
|
|
326
|
|
|
197
|
|
|
326
|
|
|
65
|
|
|
–
|
| |||||||||
|
Net revenues
|
|
3,230
|
|
|
3,047
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|
|
4,033
|
|
|
6
|
|
|
(20)
|
| |||||||||
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PLATFORM SOLUTIONS
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|
Consumer platforms |
501 | 577 | 290 | (13) | 73 | |||||||||||||||||||
| Transaction banking and other
|
|
77
|
|
|
82
|
|
|
88
|
|
|
(6)
|
|
|
(13)
|
| |||||||||
|
Net revenues
|
|
578
|
|
|
659
|
|
|
378
|
|
|
(12)
|
|
|
53
|
| |||||||||
|
Total net revenues
|
|
$ 11,817
|
|
|
$ 10,895
|
|
|
$ 11,975
|
|
|
8
|
|
|
(1)
|
| |||||||||
|
Geographic Net Revenues (unaudited)3 |
|
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| $ in millions | ||||||||||||||||||||||||
| THREE MONTHS ENDED | ||||||||||||||||||||||||
| SEPTEMBER 30, 2023 |
JUNE 30, 2023 |
SEPTEMBER 30, 2022 |
||||||||||||||||||||||
|
Americas
|
$ 7,570 | $ 6,801 | $ 7,435 | |||||||||||||||||||||
| EMEA
|
|
2,811 |
|
|
2,868 |
|
|
3,154 |
|
|||||||||||||||
| Asia
|
|
1,436
|
|
|
1,226
|
|
|
1,386
|
|
|||||||||||||||
|
Total net revenues
|
|
$ 11,817
|
|
|
$ 10,895
|
|
|
$ 11,975
|
|
|||||||||||||||
| Americas
|
64% | 63% | 62% | |||||||||||||||||||||
| EMEA
|
|
24% |
|
|
26% |
|
|
26% |
|
|||||||||||||||
| Asia
|
|
12%
|
|
|
11%
|
|
|
12%
|
|
|||||||||||||||
|
Total
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|||||||||||||||
7
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
The Goldman Sachs Group, Inc. and Subsidiaries
Segment Net Revenues (unaudited)
$ in millions
| NINE MONTHS ENDED | % CHANGE FROM | |||||||||||||||
| SEPTEMBER 30, 2023 |
SEPTEMBER 30, 2022 |
SEPTEMBER 30, 2022 |
||||||||||||||
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GLOBAL BANKING & MARKETS
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||||||||||||||||
| Advisory |
$ 2,294 | $ 3,296 | (30) % | |||||||||||||
|
Equity underwriting
|
|
901
|
|
|
665
|
|
|
35
|
| |||||||
| Debt underwriting
|
|
1,369
|
|
|
1,526
|
|
|
(10) |
| |||||||
| Investment banking fees |
4,564 | 5,487 | (17) | |||||||||||||
| FICC intermediation
|
|
8,023
|
|
|
9,916
|
|
|
(19)
|
| |||||||
| FICC financing
|
|
2,003
|
|
|
2,073
|
|
|
(3)
|
| |||||||
| FICC |
10,026 | 11,989 | (16) | |||||||||||||
| Equities intermediation
|
|
4,987
|
|
|
5,553
|
|
|
(10)
|
| |||||||
| Equities financing
|
|
3,955
|
|
|
3,362
|
|
|
18
|
| |||||||
| Equities |
8,942 | 8,915 | – | |||||||||||||
| Other
|
|
110
|
|
|
(423)
|
|
|
N.M.
|
| |||||||
|
Net revenues
|
|
23,642
|
|
|
25,968
|
|
|
(9)
|
| |||||||
|
ASSET & WEALTH MANAGEMENT
|
||||||||||||||||
| Management and other fees
|
7,041 | 6,533 | 8 | |||||||||||||
| Incentive fees
|
|
102
|
|
|
320
|
|
|
(68)
|
| |||||||
| Private banking and lending
|
|
1,915
|
|
|
1,705
|
|
|
12 |
| |||||||
| Equity investments
|
|
(496)
|
|
|
323
|
|
|
N.M.
|
| |||||||
| Debt investments
|
|
931
|
|
|
934
|
|
|
–
|
| |||||||
|
Net revenues
|
|
9,493
|
|
|
9,815
|
|
|
(3)
|
| |||||||
|
PLATFORM SOLUTIONS
|
||||||||||||||||
| Consumer platforms |
1,568 | 743 | 111 | |||||||||||||
|
Transaction banking and other
|
|
233
|
|
|
246
|
|
|
(5)
|
| |||||||
|
Net revenues
|
|
1,801
|
|
|
989
|
|
|
82
|
| |||||||
|
Total net revenues
|
|
$ 34,936
|
|
|
$ 36,772
|
|
|
(5)
|
| |||||||
|
Geographic Net Revenues (unaudited)3 |
|
|||||||||||||||
| $ in millions | ||||||||||||||||
| NINE MONTHS ENDED | ||||||||||||||||
| SEPTEMBER 30, 2023 |
SEPTEMBER 30, 2022 |
|||||||||||||||
|
Americas
|
$ 21,565 | $ 21,749 | ||||||||||||||
| EMEA
|
|
9,263 |
|
|
10,454 |
|
||||||||||
| Asia
|
|
4,108
|
|
|
4,569
|
|
||||||||||
|
Total net revenues
|
|
$ 34,936
|
|
|
$ 36,772
|
|
||||||||||
| Americas
|
62% | 59% | ||||||||||||||
| EMEA
|
|
26% |
|
|
29% |
|
||||||||||
| Asia
|
|
12%
|
|
|
12%
|
|
||||||||||
|
Total
|
|
100%
|
|
|
100%
|
|
||||||||||
8
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
The Goldman Sachs Group, Inc. and Subsidiaries
Consolidated Statements of Earnings (unaudited)
In millions, except per share amounts and headcount
| THREE MONTHS ENDED | % CHANGE FROM | |||||||||||||||||||||||
| SEPTEMBER 30, 2023 |
JUNE 30, 2023 |
SEPTEMBER 30, 2022 |
JUNE 30, 2023 |
SEPTEMBER 30, 2022 |
||||||||||||||||||||
|
REVENUES |
||||||||||||||||||||||||
|
Investment banking |
$ 1,555 | $ 1,432 | $ 1,544 | 9 % | 1 % | |||||||||||||||||||
|
Investment management |
2,409 | 2,356 | 2,283 | 2 | 6 | |||||||||||||||||||
|
Commissions and fees |
883 | 893 | 992 | (1) | (11) | |||||||||||||||||||
|
Market making |
4,958 | 4,351 | 4,641 | 14 | 7 | |||||||||||||||||||
|
Other principal transactions |
465 | 179 | 472 | 160 | (1) | |||||||||||||||||||
|
Total non-interest revenues |
10,270 | 9,211 | 9,932 | 11 | 3 | |||||||||||||||||||
| Interest income |
18,257 | 16,836 | 8,550 | 8 | 114 | |||||||||||||||||||
|
Interest expense |
16,710 | 15,152 | 6,507 | 10 | 157 | |||||||||||||||||||
|
Net interest income |
1,547 | 1,684 | 2,043 | (8) | (24) | |||||||||||||||||||
|
Total net revenues |
11,817 | 10,895 | 11,975 | 8 | (1) | |||||||||||||||||||
|
Provision for credit losses |
7 | 615 | 515 | (99) | (99) | |||||||||||||||||||
|
OPERATING EXPENSES |
||||||||||||||||||||||||
|
Compensation and benefits |
4,188 | 3,619 | 3,606 | 16 | 16 | |||||||||||||||||||
|
Transaction based |
1,452 | 1,385 | 1,317 | 5 | 10 | |||||||||||||||||||
|
Market development |
136 | 146 | 199 | (7) | (32) | |||||||||||||||||||
|
Communications and technology |
468 | 482 | 459 | (3) | 2 | |||||||||||||||||||
|
Depreciation and amortization |
1,512 | 1,594 | 666 | (5) | 127 | |||||||||||||||||||
|
Occupancy |
267 | 253 | 255 | 6 | 5 | |||||||||||||||||||
|
Professional fees |
377 | 392 | 465 | (4) | (19) | |||||||||||||||||||
|
Other expenses |
654 | 673 | 737 | (3) | (11) | |||||||||||||||||||
|
Total operating expenses |
9,054 | 8,544 | 7,704 | 6 | 18 | |||||||||||||||||||
| Pre-tax earnings |
2,756 | 1,736 | 3,756 | 59 | (27) | |||||||||||||||||||
|
Provision for taxes |
698 | 520 | 687 | 34 | 2 | |||||||||||||||||||
|
Net earnings |
2,058 | 1,216 | 3,069 | 69 | (33) | |||||||||||||||||||
|
Preferred stock dividends |
176 | 145 | 107 | 21 | 64 | |||||||||||||||||||
|
Net earnings applicable to common shareholders |
$ 1,882 | $ 1,071 | $ 2,962 | 76 | (36) | |||||||||||||||||||
|
EARNINGS PER COMMON SHARE |
||||||||||||||||||||||||
|
Basic3 |
$ 5.52 | $ 3.09 | $ 8.35 | 79 % | (34) % | |||||||||||||||||||
|
Diluted |
$ 5.47 | $ 3.08 | $ 8.25 | 78 | (34) | |||||||||||||||||||
|
AVERAGE COMMON SHARES |
||||||||||||||||||||||||
|
Basic |
338.7 | 342.3 | 352.8 | (1) | (4) | |||||||||||||||||||
|
Diluted |
343.9 | 347.2 | 359.2 | (1) | (4) | |||||||||||||||||||
|
SELECTED DATA AT PERIOD-END |
||||||||||||||||||||||||
|
Common shareholders’ equity |
$ 106,074 | $ 105,790 | $ 108,587 | – | (2) | |||||||||||||||||||
|
Basic shares3 |
338.0 | 342.0 | 352.3 | (1) | (4) | |||||||||||||||||||
| Book value per common share |
$ 313.83 | $ 309.33 | $ 308.22 | 1 | 2 | |||||||||||||||||||
| Headcount |
|
45,900
|
|
|
44,600
|
|
|
49,100
|
|
|
3
|
|
|
(7)
|
| |||||||||
9
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
The Goldman Sachs Group, Inc. and Subsidiaries
Consolidated Statements of Earnings (unaudited)
In millions, except per share amounts
| NINE MONTHS ENDED | % CHANGE FROM | |||||||||||||||||||
| SEPTEMBER 30, 2023 |
SEPTEMBER 30, 2022 |
SEPTEMBER 30, 2022 |
||||||||||||||||||
|
REVENUES
|
||||||||||||||||||||
| Investment banking
|
|
$ 4,565
|
|
|
$ 5,487
|
|
|
(17) %
|
|
|||||||||||
| Investment management
|
|
7,054
|
|
|
6,747
|
|
|
5
|
|
|||||||||||
| Commissions and fees
|
|
2,864
|
|
|
3,066
|
|
|
(7)
|
|
|||||||||||
| Market making
|
|
14,742
|
|
|
15,583
|
|
|
(5)
|
|
|||||||||||
| Other principal transactions
|
|
699
|
|
|
285
|
|
|
145
|
|
|||||||||||
|
Total non-interest revenues
|
|
29,924
|
|
|
31,168
|
|
|
(4)
|
|
|||||||||||
| Interest income
|
|
50,031
|
|
|
16,613
|
|
|
201
|
|
|||||||||||
| Interest expense
|
|
45,019
|
|
|
11,009
|
|
|
309
|
|
|||||||||||
|
Net interest income
|
|
5,012
|
|
|
5,604
|
|
|
(11)
|
|
|||||||||||
|
Total net revenues
|
|
34,936
|
|
|
36,772
|
|
|
(5)
|
|
|||||||||||
|
Provision for credit losses
|
|
451
|
|
|
1,743
|
|
|
(74)
|
|
|||||||||||
|
OPERATING EXPENSES
|
||||||||||||||||||||
| Compensation and benefits
|
|
11,897
|
|
|
11,384
|
|
|
5
|
|
|||||||||||
| Transaction based
|
|
4,242
|
|
|
3,878
|
|
|
9
|
|
|||||||||||
| Market development
|
|
454
|
|
|
596
|
|
|
(24)
|
|
|||||||||||
| Communications and technology
|
|
1,416
|
|
|
1,327
|
|
|
7
|
|
|||||||||||
| Depreciation and amortization
|
|
4,076
|
|
|
1,728
|
|
|
136
|
|
|||||||||||
| Occupancy
|
|
785
|
|
|
765
|
|
|
3
|
|
|||||||||||
| Professional fees
|
|
1,152
|
|
|
1,392
|
|
|
(17)
|
|
|||||||||||
| Other expenses
|
|
1,978
|
|
|
2,003
|
|
|
(1)
|
|
|||||||||||
|
Total operating expenses
|
|
26,000
|
|
|
23,073
|
|
|
13
|
|
|||||||||||
| Pre-tax earnings
|
|
8,485
|
|
|
11,956
|
|
|
(29)
|
|
|||||||||||
| Provision for taxes
|
|
1,977
|
|
|
2,021
|
|
|
(2)
|
|
|||||||||||
|
Net earnings
|
|
6,508
|
|
|
9,935
|
|
|
(34)
|
|
|||||||||||
| Preferred stock dividends
|
|
468
|
|
|
356
|
|
|
31
|
|
|||||||||||
|
Net earnings applicable to common shareholders
|
|
$ 6,040
|
|
|
$ 9,579
|
|
|
(37)
|
|
|||||||||||
|
EARNINGS PER COMMON SHARE
|
||||||||||||||||||||
| Basic3
|
|
$ 17.52
|
|
|
$ 27.03
|
|
|
(35) %
|
|
|||||||||||
| Diluted
|
|
$ 17.39
|
|
|
$ 26.71
|
|
|
(35)
|
|
|||||||||||
|
AVERAGE COMMON SHARES
|
||||||||||||||||||||
| Basic
|
|
342.5
|
|
|
353.0
|
|
|
(3)
|
|
|||||||||||
| Diluted
|
|
347.4
|
|
|
358.6
|
|
|
(3)
|
|
|||||||||||
10
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
The Goldman Sachs Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (unaudited)4
$ in billions
| AS OF | ||||||||||||||||||||||
| SEPTEMBER 30, 2023 |
JUNE 30, 2023 |
|||||||||||||||||||||
|
ASSETS
|
||||||||||||||||||||||
| Cash and cash equivalents |
$ 240 | $ 271 | ||||||||||||||||||||
| Collateralized agreements |
387 | 388 | ||||||||||||||||||||
| Customer and other receivables |
141 | 157 | ||||||||||||||||||||
| Trading assets |
448 | 400 | ||||||||||||||||||||
| Investments |
146 | 138 | ||||||||||||||||||||
| Loans |
178 | 178 | ||||||||||||||||||||
| Other assets |
37 | 39 | ||||||||||||||||||||
|
Total assets |
$ 1,577 | $ 1,571 | ||||||||||||||||||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||||||||||||
| Deposits |
$ 403 | $ 399 | ||||||||||||||||||||
| Collateralized financings |
295 | 284 | ||||||||||||||||||||
| Customer and other payables |
253 | 258 | ||||||||||||||||||||
| Trading liabilities |
195 | 194 | ||||||||||||||||||||
| Unsecured short-term borrowings |
70 | 70 | ||||||||||||||||||||
| Unsecured long-term borrowings |
224 | 231 | ||||||||||||||||||||
| Other liabilities |
20 | 19 | ||||||||||||||||||||
|
Total liabilities |
1,460 | 1,455 | ||||||||||||||||||||
| Shareholders’ equity |
117 | 116 | ||||||||||||||||||||
|
Total liabilities and shareholders’ equity |
$ 1,577 | $ 1,571 | ||||||||||||||||||||
|
Capital Ratios and Supplementary Leverage Ratio (unaudited)3,4 $ in billions
|
|
|||||||||||||||||||||
| AS OF | ||||||||||||||||||||||
| SEPTEMBER 30, 2023 |
JUNE 30, 2023 |
|||||||||||||||||||||
| Common equity tier 1 capital |
$ 98.8 | $ 98.2 | ||||||||||||||||||||
|
STANDARDIZED CAPITAL RULES |
||||||||||||||||||||||
| Risk-weighted assets |
$ 667 | $ 661 | ||||||||||||||||||||
| Common equity tier 1 capital ratio |
14.8% | 14.9% | ||||||||||||||||||||
|
ADVANCED CAPITAL RULES |
||||||||||||||||||||||
| Risk-weighted assets |
$ 669 | $ 684 | ||||||||||||||||||||
| Common equity tier 1 capital ratio |
14.8% | 14.4% | ||||||||||||||||||||
|
SUPPLEMENTARY LEVERAGE RATIO |
||||||||||||||||||||||
| Supplementary leverage ratio |
5.6% | 5.6% | ||||||||||||||||||||
|
Average Daily VaR (unaudited)3,4 $ in millions
|
|
|||||||||||||||||||||
| THREE MONTHS ENDED | ||||||||||||||||||||||
| SEPTEMBER 30, 2023 |
JUNE 30, 2023 |
|||||||||||||||||||||
|
RISK CATEGORIES |
||||||||||||||||||||||
| Interest rates |
$ 88 | $ 118 | ||||||||||||||||||||
| Equity prices |
28 | 31 | ||||||||||||||||||||
| Currency rates |
19 | 25 | ||||||||||||||||||||
| Commodity prices |
18 | 16 | ||||||||||||||||||||
| Diversification effect |
(66) | (73) | ||||||||||||||||||||
|
Total |
$ 87 | $ 117 | ||||||||||||||||||||
11
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
The Goldman Sachs Group, Inc. and Subsidiaries
Assets Under Supervision (unaudited)3,4
$ in billions
| AS OF | ||||||||||||||||||||||||||
| SEPTEMBER 30, 2023 |
JUNE 30, 2023 |
SEPTEMBER 30, 2022 |
||||||||||||||||||||||||
|
ASSET CLASS
|
||||||||||||||||||||||||||
| Alternative investments
|
$ 267 | $ 267 | $ 256 | |||||||||||||||||||||||
| Equity
|
607 | 627 | 516 | |||||||||||||||||||||||
| Fixed income
|
|
1,031
|
|
|
1,056
|
|
|
955
|
|
|||||||||||||||||
|
Total long-term AUS
|
|
1,905
|
|
|
1,950
|
|
|
1,727
|
|
|||||||||||||||||
| Liquidity products
|
|
775
|
|
|
764
|
|
|
700
|
|
|||||||||||||||||
|
Total AUS
|
|
$ 2,680
|
|
|
$ 2,714
|
|
|
$ 2,427
|
|
|||||||||||||||||
| THREE MONTHS ENDED | ||||||||||||||||||||||||||
| SEPTEMBER 30, 2023 |
JUNE 30, 2023 |
SEPTEMBER 30, 2022 |
||||||||||||||||||||||||
|
Beginning balance
|
|
$ 2,714
|
|
|
$ 2,672
|
|
|
$ 2,495
|
|
|||||||||||||||||
| Net inflows / (outflows):
|
||||||||||||||||||||||||||
| Alternative investments
|
2 | (1) | 7 | |||||||||||||||||||||||
| Equity
|
– | (3) | (2) | |||||||||||||||||||||||
| Fixed income
|
5 | 12 | 4 | |||||||||||||||||||||||
|
Total long-term AUS net inflows / (outflows)
|
|
7
|
|
|
8
|
|
|
9
|
|
|||||||||||||||||
| Liquidity products
|
|
11
|
|
|
4
|
|
|
18
|
|
|||||||||||||||||
|
Total AUS net inflows / (outflows)
|
|
18
|
|
|
12
|
|
|
27
|
|
|||||||||||||||||
| Acquisitions / (dispositions)
|
|
–
|
|
|
–
|
|
|
4
|
|
|||||||||||||||||
| Net market appreciation / (depreciation)
|
|
(52)
|
|
|
30
|
|
|
(99)
|
|
|||||||||||||||||
|
Ending balance
|
|
$ 2,680
|
|
|
$ 2,714
|
|
|
$ 2,427
|
|
|||||||||||||||||
12
Goldman Sachs Reports
Third Quarter 2023 Earnings Results
|
Footnotes |
|
|
| 1. | Annualized ROE is calculated by dividing annualized net earnings applicable to common shareholders by average monthly common shareholders’ equity. Annualized ROTE is calculated by dividing annualized net earnings applicable to common shareholders by average monthly tangible common shareholders’ equity (tangible common shareholders’ equity is calculated as total shareholders’ equity less preferred stock, goodwill and identifiable intangible assets). Management believes that ROTE is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed internally, and that tangible common shareholders’ equity is meaningful because it is a measure that the firm and investors use to assess capital adequacy. ROTE and tangible common shareholders’ equity are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. |
The table below presents a reconciliation of average common shareholders’ equity to average tangible common shareholders’ equity:
| AVERAGE FOR THE | ||||||||||||
| Unaudited, $ in millions
|
THREE MONTHS ENDED SEPTEMBER 30, 2023 |
NINE MONTHS ENDED SEPTEMBER 30, 2023 |
||||||||||
| Total shareholders’ equity
|
$ 116,298 | $ 116,637 | ||||||||||
| Preferred stock
|
|
(10,953)
|
|
|
(10,803)
|
|
||||||
|
Common shareholders’ equity
|
|
105,345
|
|
|
105,834
|
|
||||||
|
Goodwill |
|
(5,934)
|
|
|
(6,218)
|
|
||||||
| Identifiable intangible assets
|
|
(1,764)
|
|
|
(1,888)
|
|
||||||
|
Tangible common shareholders’ equity
|
|
$ 97,647
|
|
|
$ 97,728
|
|
||||||
| 2. | Dealogic – January 1, 2023 through September 30, 2023. |
| 3. | For information about the following items, see the referenced sections in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the firm’s Quarterly Report on Form 10-Q for the period ended June 30, 2023: (i) Investment banking fees backlog – see “Results of Operations – Global Banking & Markets” (ii) assets under supervision – see “Results of Operations – Asset & Wealth Management – Assets Under Supervision” (iii) efficiency ratio – see “Results of Operations – Operating Expenses” (iv) share repurchase program – see “Capital Management and Regulatory Capital – Capital Management” (v) global core liquid assets – see “Risk Management – Liquidity Risk Management” (vi) basic shares – see “Balance Sheet and Funding Sources – Balance Sheet Analysis and Metrics” and (vii) VaR – see “Risk Management – Market Risk Management.” |
| For information about the following items, including changes made to the firm’s segments and reclassifications made to previously reported amounts, see the referenced sections in Part I, Item 1 “Financial Statements (Unaudited)” in the firm’s Quarterly Report on Form 10-Q for the period ended June 30, 2023: (i) risk-based capital ratios and the supplementary leverage ratio – see Note 20 “Regulation and Capital Adequacy” (ii) geographic net revenues – see Note 25 “Business Segments” and (iii) unvested share-based awards that have non-forfeitable rights to dividends or dividend equivalents in calculating basic EPS – see Note 21 “Earnings Per Common Share.” |
| 4. | Represents a preliminary estimate for the third quarter of 2023 and may be revised in the firm’s Quarterly Report on Form 10-Q for the period ended September 30, 2023. |
13
Exhibit 99.2 Third Quarter 2023 Earnings Results Presentation October 17, 2023
Results Snapshot Net Revenues Net Earnings EPS 3Q23 $11.82 billion 3Q23 $2.06 billion 3Q23 $5.47 3Q23 YTD $34.94 billion 3Q23 YTD $6.51 billion 3Q23 YTD $17.39 1 1 Annualized ROE Annualized ROTE Book Value Per Share 3Q23 7.1% 3Q23 7.7% 3Q23 $313.83 3Q23 YTD 7.6% 3Q23 YTD 8.2% YTD Growth 3.4% 5 Highlights Selected Items $ in millions, except per share amounts 2 3Q23 #1 in M&A, equity & equity-related offerings and common stock offerings Pre-tax earnings: 6 $ (728) AWM historical principal investments Strong performances in FICC and Equities; GreenSky (203) Record FICC financing net revenues (37) Marcus loans portfolio (25) Personal Financial Management Record Management and other fees of $2.41 billion; (993) Total impact to pre-tax earnings $ 3,4 AUS of $2.68 trillion $ (828) Impact to net earnings Impact to EPS $ (2.41) Announced agreements to sell GreenSky (3.1)pp Impact to annualized ROE and Personal Financial Management 1
Financial Overview Financial Results Financial Overview Highlights vs.n 3Q23 results included EPS of $5.47 and ROE of 7.1% vs. vs. 3Q23 3Q22 $ in millions, — 3Q23 net revenues were essentially unchanged YoY reflecting significantly lower net except per share amounts 3Q23 2Q23 3Q22 YTD YTD revenues in Asset & Wealth Management, offset by higher net revenues in Global Banking & Markets and Platform Solutions $ 8,009 11% 6% $ 23,642 (9)% Global Banking & Markets — 3Q23 provision for credit losses was $7 million Asset & Wealth Management 3,230 6% (20)% 9,493 (3)% o Reflecting net provisions related to both the credit card portfolio (primarily driven by net charge-offs) and wholesale loans (driven by impairments, partially offset by a reserve reduction based on increased stability in the macroeconomic environment) 578 (12)% 53% 1,801 82% Platform Solutions o Offset by a net release related to the GreenSky loan portfolio (including a reserve 11,817 8% (1)% 34,936 (5)% Net revenues reduction of $637 million related to the transfer of the portfolio to held for sale) — 3Q23 operating expenses were higher YoY primarily driven by higher compensation and 7 (99)% (99)% 451 (74)% Provision for credit losses benefits expenses, a write-down of intangibles of $506 million related to GreenSky and impairments of $358 million related to consolidated real estate investments 9,054 6% 18% 26,000 13% Operating expenses Net Revenues by Segment ($ in millions) $ 2,756 59% (27)% $ 8,485 (29)% Pre-tax earnings $11,975 $11,817 $ 2,058 69% (33)% $ 6,508 (34)% Net earnings $10,895 Global Banking & $ 1,882 76% (36)% $ 6,040 (37)% Net earnings to common Markets $7,564 $8,009 Diluted EPS $ 5.47 78% (34)% $ 17.39 (35)% Asset & Wealth $7,189 Management 1 ROE 7.1% 3.1pp (3.9)pp 7.6% (4.6)pp Platform Solutions 1 ROTE 7.7% 3.3pp (4.3)pp 8.2% (4.9)pp $4,033 $3,230 $3,047 3 76.6% (1.8)pp 12.3pp 74.4% 11.7pp Efficiency Ratio $659 $378 $578 3Q23 2Q23 3Q22 2
Global Banking & Markets Financial Results Global Banking & Markets Highlights vs.n 3Q23 net revenues were higher YoY vs. vs. 3Q23 3Q22 — Investment banking fees reflected higher net revenues in Debt underwriting and Equity $ in millions 3Q23 2Q23 3Q22 YTD YTD underwriting, offset by lower net revenues in Advisory — FICC reflected lower net revenues in intermediation $ 1,554 9% 1% $ 4,564 (17)% Investment banking fees — Equities reflected higher net revenues in financing and intermediation 3 3,384 25% (6)% 10,026 (16)% FICCn Investment banking fees backlog decreased vs. 2Q23, primarily in Advisory 4 n 3Q23 select data : 2,961 – 8% 8,942 – Equities — Total assets of $1.32 trillion — Loan balance of $109 billion 110 36% N.M. 110 N.M. Other — Net interest income of $171 million 8,009 11% 6% 23,642 (9)% Net revenues Provision for credit losses 29 (48)% (54)% 214 (54)% Global Banking & Markets Net Revenues ($ in millions) Operating expenses 4,791 12% 13% 13,702 1% $8,009 $7,564 Pre-tax earnings $ 3,189 12% (3)% $ 9,726 (18)% $7,189 $1,554 Investment $1,544 banking fees Net earnings $ 2,383 14% (11)% $ 7,460 (24)% $1,431 FICC Net earnings to common $ 2,250 14% (13)% $ 7,108 (26)% $3,384 $3,617 Equities $2,711 Average common equity $ 72,517 2% 1% $ 70,968 1% Other Return on average common equity 12.4% 1.3pp (2.0)pp 13.4% (4.9)pp $2,961 $2,966 $2,732 $110 $81 $(329) 3Q23 2Q23 3Q22 3
Global Banking & Markets – Net Revenues Net Revenues Global Banking & Markets Net Revenues Highlights vs.n 3Q23 Investment banking fees were essentially unchanged YoY vs. vs. 3Q23 3Q22 — Advisory reflected a decline in completed mergers and acquisitions transactions $ in millions 3Q23 2Q23 3Q22 YTD YTD — Debt underwriting primarily reflected an increase in leveraged finance activity $ 831 29% (15)% $ 2,294 (30)% Advisory — Equity underwriting primarily reflected higher net revenues from initial public offerings 308 (9)% 26% 901 35% Equity underwritingn 3Q23 FICC net revenues were lower YoY — FICC intermediation reflected significantly lower net revenues in currencies and commodities 415 (7)% 27% 1,369 (10)% Debt underwriting and lower net revenues in credit products, partially offset by significantly higher net revenues in interest rate products and mortgages 1,554 9% 1% 4,564 (17)% Investment banking fees — FICC financing net revenues increased slightly and were a record n 3Q23 Equities net revenues were higher YoY 2,654 27% (8)% 8,023 (19)% FICC intermediation — Equities intermediation primarily reflected higher net revenues in derivatives FICC financing 730 17% 1% 2,003 (3)% — Equities financing reflected significantly higher net revenues in prime financing, partially offset by significantly lower net revenues from portfolio financing FICC 3,384 25% (6)% 10,026 (16)% n 3Q23 Other net revenues YoY primarily reflected significantly lower net losses on hedges and the absence of net mark-downs on acquisition financing activities included in 3Q22 Equities intermediation 1,713 12% 7% 4,987 (10)% Equities financing 1,248 (13)% 11% 3,955 18% Equities 2,961 – 8% 8,942 – Other 110 36% N.M. 110 N.M. Net revenues $ 8,009 11% 6% $ 23,642 (9)% 4
Asset & Wealth Management Financial Results Asset & Wealth Management Highlights vs.n 3Q23 net revenues were significantly lower YoY vs. vs. 3Q23 3Q22 — Record Management and other fees primarily reflected the impact of higher average AUS $ in millions 3Q23 2Q23 3Q22 YTD YTD — Private banking and lending net revenues were slightly higher as the impact of higher deposit balances and spreads was largely offset by the impact of the sale of substantially all of the $ 2,405 2% 7% $ 7,041 8% Management and other fees Marcus loans portfolio earlier in the year — Equity investments reflected net losses from investments in private equities, due to net losses 24 (4)% (57)% 102 (68)% from real estate investments and significantly lower net gains from company-specific events, Incentive fees and net losses from investments in public equities, both compared with net gains in 3Q22 o Private: 3Q23 ~$(170) million, compared to 3Q22 ~$505 million 687 (21)% 2% 1,915 12% Private banking and lending o Public: 3Q23 ~$(40) million, compared to 3Q22 ~$220 million n 3Q23 operating expenses included impairments of $358 million related to consolidated real estate (212) N.M. N.M. (496) N.M. Equity investments investments n The impact to 3Q23 YTD pre-tax margin of 6% from the results of Marcus loans and historical 6 Debt investments 326 65% – 931 – principal investments was a reduction of 18pp 4 n 3Q23 select data : — Total assets of $191 billion Net revenues 3,230 6% (20)% 9,493 (3)% — Loan balance of $47 billion, of which $33 billion related to Private banking and lending — Net interest income of $686 million Provision for credit losses 51 240% N.M. (499) N.M. Asset & Wealth Management Net Revenues ($ in millions) Operating expenses 3,005 (8)% 2% 9,448 15% $4,033 Pre-tax earnings / (loss) $ 174 N.M. (84)% $ 544 (58)% Management and $3,230 $3,047 other fees Incentive Net earnings / (loss) $ 129 N.M. (86)% $ 417 (61)% $2,255 fees Private banking and Net earnings / (loss) to common $ 93 N.M. (89)% $ 318 (68)% $2,354 lending $2,405 $56 Equity investments $675 Average common equity $ 28,601 (8)% (9)% $ 30,806 (1)% Debt $24 $25 investments $721 $687 $874 Return on average common equity 1.3% 4.4pp (9.9)pp 1.4% (2.8)pp $326 $197 $326 $(212) $(403) 5 3Q23 2Q23 3Q22
Asset & Wealth Management – Assets Under Supervision 3,4 3,4 AUS Rollforward AUS Highlights n During the quarter, AUS decreased $34 billion to $2.68 trillion $ in billions 3Q23 2Q23 3Q22 — Long-term net inflows of $7 billion, primarily in fixed income assets Beginning balance $ 2,714 $ 2,672 $ 2,495 — Liquidity products net inflows of $11 billion 7 8 9 Long-term AUS net inflows / (outflows) — Net market depreciation of $52 billion, primarily in fixed income and equity assets Liquidity products 11 4 18 Total AUS net inflows / (outflows) 18 12 27 Acquisitions / (dispositions) – – 4 3,4 3Q23 AUS Mix Net market appreciation / (depreciation) (52) 30 (99) $ 2,680 $ 2,714 $ 2,427 10% Ending balance 29% 37% 38% 23% Asset Client 3,4 Class Channel AUS by Asset Class $ in billions 3Q23 2Q23 3Q22 34% 29% $ 267 $ 267 $ 256 Alternative investments Equity 607 627 516 7% 14% Fixed income 1,031 1,056 955 Long-term AUS 1,905 1,950 1,727 21% Liquidity products 775 764 700 Region 53% Vehicle 33% $ 2,680 $ 2,714 $ 2,427 Total AUS 72% 6
Asset & Wealth Management – Alternative Investments 4 4 Alternative Investments AUS and Effective Fees Alternative Investments Highlights n 3Q23 Management and other fees from alternative investments were $542 million, up 12% compared with 3Q22 3Q23 n Alternative investments AUS ended the quarter at $267 billion, unchanged QoQ $ in billions Average AUS Effective Fees (bps) 98 80 Corporate equity $n 3Q23 gross third-party alternatives fundraising across strategies was $15 billion, including: Credit 46 78 — $4 billion in corporate equity, $6 billion in credit, $1 billion in real estate and $4 billion in hedge funds and other Real estate 20 69 — $219 billion raised since the end of 2019 Hedge funds and other 64 61 n During the quarter, on-balance sheet alternative investments declined by $3.9 billion to $49.3 Funds and discretionary accounts 228 73 billion Advisory accounts 39 16 6 — Historical principal investments declined by $3.2 billion to $20.6 billion and included $4.1 Total alternative investments AUS $ 267 65 billion of loans, $4.2 billion of debt securities, $4.5 billion of equity securities and $7.8 billion of CIE investments and other 4 4,6 On-Balance Sheet Alternative Investments Historical Principal Investments Rollforward ($ in billions) $ in billions 3Q23 2Q23 Loans $ $ 14.0 16.1 $(2.5) $29.7 $(8.1) $1.5 Debt securities 11.5 12.1 Equity securities 13.5 13.5 $20.6 7 CIE investments and other 10.3 11.5 Total On-B/S alternative investments $ $ 49.3 53.2 Client co-invest $ 22.1 $ 22.8 Firmwide initiatives / CRA investments 6.6 6.6 6 Historical principal investments 20.6 23.8 Total On-B/S alternative investments $ 49.3 $ 53.2 8 7
Platform Solutions Financial Results Platform Solutions Highlights vs.n 3Q23 net revenues were higher YoY vs. vs. 3Q23 3Q22 — Consumer platforms primarily reflected significantly higher average credit card balances, $ in millions 3Q23 2Q23 3Q22 YTD YTD partially offset by lower net revenues from the GreenSky loan portfolio, which included a mark-down of $123 million related to the transfer of the portfolio to held for sale $ 501 (13)% 73% $ 1,568 111% Consumer platforms — Transaction banking and other reflected lower average deposit balances n 3Q23 provision for credit losses of $(73) million reflected a net release related to the GreenSky 77 (6)% (13)% 233 (5)% Transaction banking and other loan portfolio (including a reserve reduction of $637 million related to the transfer of the portfolio to held for sale), partially offset by net provisions related to the credit card portfolio (primarily Net revenues 578 (12)% 53% 1,801 82% driven by net charge-offs) n 3Q23 operating expenses included a write-down of intangibles of $506 million related to (73) N.M. N.M. 736 (22)% Provision for credit losses GreenSky 4 n 3Q23 select data : 1,258 27% 140% 2,850 127% Operating expenses — Total assets of $68 billion — Loan balance of $22 billion Pre-tax earnings / (loss) $ (607) N.M. N.M. $ (1,785) N.M. — Net interest income of $690 million — Active Consumer platforms customers of 14.7 million Net earnings / (loss) $ (454) N.M. N.M. $ (1,369) N.M. Net earnings / (loss) to common $ (461) N.M. N.M. $ (1,386) N.M. Platform Solutions Net Revenues ($ in millions) $659 Average common equity $ 4,227 5% 7% $ 4,060 17% $578 Return on average common equity (43.6)% 23.2pp 7.7pp (45.5)% (6.6)pp Consumer $378 platforms $577 Transaction $501 banking and other $290 $82 $88 $77 8 3Q23 2Q23 3Q22
Loans and Net Interest Income 4 4 Loans by Segment ($ in billions) Loans by Type 3Q23 Metrics $178 $178 $ in billions 3Q23 2Q23 3Q22 $177 2.9% ALLL to Total Corporate $ 37 $ 38 $ 40 Gross Loans, at Amortized Cost Commercial real estate 26 28 30 Residential real estate 24 24 24 1.7% $109 $107 $110 Global Banking ALLL to Gross Securities-based lending 15 15 18 & Markets Wholesale Loans, at Other collateralized lending 55 54 49 Amortized Cost Asset & Wealth Management Installment 6 5 5 13.3% Platform ALLL to Gross Credit cards 18 17 14 Solutions $47 $49 $57 Consumer Loans, at Other 2 2 2 Amortized Cost Allowance for loan losses (5) (5) (5) $22 $19 $13 ~80% Gross Loans Total loans $ 178 $ 178 $ 177 3Q23 2Q23 3Q22 Secured 4 Net Interest Income by Segment ($ in millions) Loans and Net Interest Income Highlights n 3Q23 total loans were unchanged QoQ $2,043 — Gross loans by type: $167 billion - amortized cost, $6 billion - fair value, $10 billion - held for sale $1,684 — Average loans of $177 billion $631 $1,547 Global Banking — Total allowance for loan losses and losses on lending commitments was $5.57 billion ($4.90 $202 & Markets $171 billion for funded loans) Asset & Wealth o $3.15 billion for wholesale loans, $2.42 billion for consumer loans Management $821 $686 — Net charge-offs of $433 million for an annualized net charge-off rate of 1.0% $948 Platform o 0.4% for wholesale loans, 5.1% for consumer loans Solutions n 3Q23 net interest income decreased 24% YoY, reflecting an increase in funding costs supporting trading activities $690 $661 3 — 3Q23 average interest-earning assets of $1.45 trillion $464 3Q23 2Q23 3Q22 9
Commercial Real Estate (CRE) 4 4 3Q23 Firmwide Loans, Net of ALLL 3Q23 AWM On-Balance Sheet Alternative Investments $ in billions $ in billions CRE-related Office-related 3Q23 Warehouse / other indirect $10 Loans (included in firmwide loans) $ 2.1 $ 0.2 Industrials $3 Multifamily $3 $xx $25 Hospitality $2 Debt securities $ 0.6 $ 0.1 Office $2 Mixed use $2 Equity securities $ 3.9 $ 0.3 Other $3 7 $ 8.4 / 3.1 $ 0.6 CIE investments CRE loans Other loans gross / net net of financings of financings 14.0% 3.4% 1.5% CRE Loans to Past Due (30+ days) Ratio 3Q23 Annualized Total Loans, Net of on CRE Loans, at Net Charge-Off Ratio ALLL Amortized Cost on CRE Loans, at Amortized Cost n 46% of the CRE loan portfolio was investment-grade, based on internally determined publicn Office-related exposures were primarily secured by Class A office properties rating agency equivalents n ~43% of the CRE-related on-balance sheet alternative investments consisted of historical 6 n Office-related loans were primarily secured by Class A office properties principal investments, which the firm intends to exit over the medium term n Additionally, the firm has $3.2 billion of CRE-related unfunded lending commitments, including $0.6 billion of office-related commitments 10
Expenses Financial Results Expense Highlights n 3Q23 total operating expenses increased YoY vs. vs. vs. 3Q23 3Q22 — Compensation and benefits expenses were higher, reflecting an increase in 3Q23 in the 3Q23 2Q23 3Q22 YTD YTD $ in millions year-to-date ratio of compensation and benefits to net revenues, net of provision for credit losses, and a reduction in the year-to-date ratio in 3Q22 Compensation and benefits $ 4,188 16% 16% $ 11,897 5% — Non-compensation expenses were significantly higher, reflecting: o A write-down of intangibles of $506 million related to GreenSky (in depreciation Transaction based 1,452 5% 10% 4,242 9% and amortization) o Impairments of $358 million related to consolidated real estate investments (in Market development 136 (7)% (32)% 454 (24)% depreciation and amortization) o Higher transaction based expenses Communications and technology 468 (3)% 2% 1,416 7% n 3Q23 YTD effective income tax rate was 23.3%, up from 22.3% for the first half of 2023, primarily due to write-offs of deferred tax assets related to the transfer of GreenSky to held for sale and changes in the geographic mix of earnings 1,512 (5)% 127% 4,076 136% Depreciation and amortization 3 Efficiency Ratio Occupancy 267 6% 5% 785 3% 74.4% Professional fees 377 (4)% (19)% 1,152 (17)% 62.7% Other expenses 654 (3)% (11)% 1,978 (1)% Total operating expenses $ 9,054 6% 18% $ 26,000 13% 698 34% 2% $ 1,977 (2)% Provision for taxes $ Effective Tax Rate 23.3% 6.4pp 3Q23 YTD 3Q22 YTD 11
Capital and Balance Sheet 3,4 3,4 Capital Capital and Balance Sheet Highlights n Standardized CET1 capital ratio decreased slightly QoQ, primarily reflecting an increase in credit RWAs on increased exposures, partially offset by a decrease in market RWAs on reduced 3Q23 2Q23 4Q22 exposures Standardized CET1 capital ratio 14.8% 14.9% 15.0% n Advanced CET1 capital ratio increased QoQ, primarily reflecting a decrease in market RWAs on reduced exposures and a decrease in operational RWAs Advanced CET1 capital ratio 14.8% 14.4% 14.4% n Returned $2.44 billion of capital to common shareholders during the quarter 3 — 4.2 million common shares repurchased for a total cost of $1.50 billion Supplementary leverage ratio (SLR) 5.6% 5.6% 5.8% — $937 million of common stock dividends n 3Q23 deposits of $403 billion consisted of consumer $151 billion, private bank $91 billion, transaction banking $68 billion, brokered CDs $34 billion, deposit sweep programs $32 billion and other $27 billion n BVPS increased 1.5% QoQ, driven by net earnings 4 Selected Balance Sheet Data Book Value $ in billions In millions, except per share amounts 3Q23 2Q23 4Q22 3Q23 2Q23 4Q22 3 Total assets Basic shares 338.0 342.0 350.8 $ 1,577 $ 1,571 $ 1,442 Deposits Book value per common share $ 313.83 $ 309.33 $ 303.55 $ 403 $ 399 $ 387 1 Unsecured long-term borrowings Tangible book value per common share $ 292.37 $ 286.34 $ 279.66 $ 224 $ 231 $ 247 Shareholders’ equity $ 117 $ 116 $ 117 3 Average GCLA $ 406 $ 410 $ 409 12
Cautionary Note Regarding Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts or statements of current conditions, but instead represent only the firm’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the firm’s control. It is possible that the firm’s actual results, financial condition and liquidity may differ, possibly materially, from the anticipated results, financial condition and liquidity in these forward-looking statements. For information about some of the risks and important factors that could affect the firm’s future results, financial condition and liquidity and the forward-looking statements below, see “Risk Factors” in Part I, Item 1A of the firm’s Annual Report on Form 10-K for the year ended December 31, 2022. Information regarding the firm’s assets under supervision, capital ratios, risk-weighted assets, supplementary leverage ratio, balance sheet data and global core liquid assets (GCLA) consists of preliminary estimates. These estimates are forward-looking statements and are subject to change, possibly materially, as the firm completes its financial statements. Statements regarding (i) estimated GDP growth or contraction, interest rate and inflation trends and volatility, (ii) the timing, profitability, benefits and other prospective aspects of business and expense initiatives and the achievability of medium- and long-term targets and goals, (iii) the future state of the firm’s liquidity and regulatory capital ratios (including the firm’s stress capital buffer and G-SIB buffer, and the potential impact of changes to U.S. regulatory capital rules), (iv) the firm’s prospective capital distributions (including dividends and repurchases), (v) the firm’s future effective income tax rate, (vi) the firm’s Investment banking fees backlog and future results, (vii) the firm’s planned 2023 benchmark debt issuances, (viii) the impact of Russia’s invasion of Ukraine and related sanctions and other developments on the firm’s business, results and financial position, and (ix) the firm’s ability to sell, and the terms of any proposed or pending sale of, the remaining Marcus loans portfolio, Asset & Wealth Management historical principal investments, GreenSky and Personal Financial Management are forward-looking statements. Statements regarding estimated GDP growth or contraction, interest rate and inflation trends and volatility are subject to the risk that actual GDP growth or contraction, interest rate and inflation trends and volatility may differ, possibly materially, due to, among other things, changes in general economic conditions and monetary and fiscal policy. Statements about the timing, profitability, benefits and other prospective aspects of business and expense initiatives and the achievability of medium- and long-term targets and goals are based on the firm’s current expectations regarding the firm’s ability to effectively implement these initiatives and achieve these targets and goals and may change, possibly materially, from what is currently expected. Statements about the future state of the firm’s liquidity and regulatory capital ratios (including the firm’s stress capital buffer and G-SIB buffer), as well as its prospective capital distributions (including dividends and repurchases), are subject to the risk that the firm’s actual liquidity, regulatory capital ratios and capital distributions may differ, possibly materially, from what is currently expected, including due to, among other things, potential future changes to regulatory capital rules. Statements about the firm’s future effective income tax rate are subject to the risk that the firm’s future effective income tax rate may differ from the anticipated rate indicated, possibly materially, due to, among other things, changes in the tax rates applicable to the firm, the firm’s earnings mix or profitability, the entities in which the firm generates profits and the assumptions made in forecasting the firm’s expected tax rate, and potential future guidance from the U.S. IRS or other tax authorities. Statements about the firm’s Investment banking fees backlog and future results are subject to the risk that transactions may be modified or may not be completed at all, and related net revenues may not be realized or may be materially less than expected. Important factors that could have such a result include, for underwriting transactions, a decline or weakness in general economic conditions, an outbreak or worsening of hostilities, including the escalation or continuation of the war between Russia and Ukraine, continuing volatility in the securities markets or an adverse development with respect to the issuer of the securities and, for financial advisory transactions, a decline in the securities markets, an inability to obtain adequate financing, an adverse development with respect to a party to the transaction or a failure to obtain a required regulatory approval. Statements regarding the firm’s planned 2023 benchmark debt issuances are subject to the risk that actual issuances may differ, possibly materially, due to changes in market conditions, business opportunities or the firm’s funding needs. Statements about the impact of Russia’s invasion of Ukraine and related sanctions and other developments on the firm’s business, results and financial position are subject to the risks that hostilities may escalate and expand, that sanctions may increase and that the actual impact may differ, possibly materially, from what is currently expected. Statements about the proposed or pending sales of the remaining Marcus loans portfolio and Asset & Wealth Management historical principal investments are subject to the risks that buyers may not bid on these assets or bid at levels, or with terms, that are unacceptable to the firm, and that the performance of these activities may deteriorate as a result of the proposed and pending sales, and statements about the pending sales of GreenSky and Personal Financial Management are subject to the risk that the transactions may not close on the anticipated timelines or at all, including due to a failure to 13 obtain requisite regulatory approvals.
Footnotes 1. Annualized return on average common shareholders’ equity (ROE) is calculated by dividing annualized net earnings applicable to common shareholders by average monthly common shareholders’ equity. Annualized return on average tangible common shareholders’ equity (ROTE) is calculated by dividing annualized net earnings applicable to common shareholders by average monthly tangible common shareholders’ equity. Tangible common shareholders’ equity is calculated as total shareholders’ equity less preferred stock, goodwill and identifiable intangible assets. Tangible book value per common share (TBVPS) is calculated by dividing tangible common shareholders’ equity by basic shares. Management believes that tangible common shareholders’ equity and TBVPS are meaningful because they are measures that the firm and investors use to assess capital adequacy and that ROTE is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed internally. Tangible common shareholders’ equity, ROTE and TBVPS are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies. The table below presents a reconciliation of average and ending common shareholders’ equity to average and ending tangible common shareholders’ equity: AVERAGE FOR THE AS OF THREE MONTHS ENDED NINE MONTHS ENDED Unaudited, $ in millions SEPTEMBER 30, 2023 SEPTEMBER 30, 2023 SEPTEMBER 30, 2023 JUNE 30, 2023 DECEMBER 31, 2022 Total shareholders’ equity $ 116,298 $ 116,637 $ 117,277 $ 116,493 $ 117,189 Preferred stock (10,953) (10,803) (11,203) (10,703) (10,703) Common shareholders’ equity 105,345 105,834 106,074 105,790 106,486 Goodwill (5,934) (6,218) (5,913) (5,942) (6,374) Identifiable intangible assets (1,764) (1,888) (1,341) (1,921) (2,009) Tangible common shareholders’ equity $ 97,647 $ 97,728 $ 98,820 $ 97,927 $ 98,103 2. Dealogic – January 1, 2023 through September 30, 2023. 3. For information about the following items, see the referenced sections in Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the firm’s Quarterly Report on Form 10-Q for the period ended June 30, 2023: (i) Investment banking fees backlog – see “Results of Operations – Global Banking & Markets” (ii) assets under supervision – see “Results of Operations – Asset & Wealth Management – Assets Under Supervision” (iii) efficiency ratio – see “Results of Operations – Operating Expenses” (iv) basic shares – see “Balance Sheet and Funding Sources – Balance Sheet Analysis and Metrics” (v) share repurchase program – see “Capital Management and Regulatory Capital – Capital Management” and (vi) global core liquid assets – see “Risk Management – Liquidity Risk Management.” For information about the following items, see the referenced sections in Part I, Item 1 “Financial Statements (Unaudited)” in the firm’s Quarterly Report on Form 10-Q for the period ended June 30, 2023: (i) interest-earning assets – see “Statistical Disclosures – Distribution of Assets, Liabilities and Shareholders’ Equity” and (ii) risk-based capital ratios and the supplementary leverage ratio – see Note 20 “Regulation and Capital Adequacy.” 4. Represents a preliminary estimate for the third quarter of 2023 and may be revised in the firm’s Quarterly Report on Form 10-Q for the period ended September 30, 2023. 5. Includes selected items that the firm has sold or is selling related to the firm’s narrowing of its ambitions in consumer-related activities and related to Asset & Wealth Management, including its transition to a less capital- intensive business. Pre-tax earnings for each selected item include the operating results of the item and, additionally, for GreenSky, a mark-down of $123 million in net revenues and a reserve reduction of $637 million in provision for credit losses (both related to the transfer of the GreenSky point-of-sale loan portfolio to held for sale), and a write-down of intangibles of $506 million. Net earnings reflect the 3Q23 effective income tax rate for the respective segment of each selected item, adjusted for a write-off of deferred tax assets related to GreenSky. 6. Includes consolidated investment entities (CIEs) and other legacy investments the firm intends to exit over the medium term (medium term refers to a 3-5 year time horizon from year-end 2022). 7. Includes CIEs and other investments. CIEs are generally accounted for at historical cost less depreciation. Substantially all of the firm’s CIEs are engaged in commercial real estate investment activities. Assets held by CIEs of $9 billion as of September 30, 2023 and $10 billion as of June 30, 2023 were funded with liabilities of approximately $6 billion as of both September 30, 2023 and June 30, 2023. Substantially all such liabilities are nonrecourse, thereby reducing the firm’s equity at risk. 14 8. Includes approximately $1.2 billion of investments that were transferred out of historical principal investments, primarily to Global Banking & Markets.