Goldman Sachs(US:GS)2024-10-15 17:38Financial Data and Key Metrics Changes - The company reported net revenues of $12.7 billion, an increase of 7% year-over-year, and earnings per share of $8.40, up 54% year-over-year [4][12] - Return on equity (ROE) was 10.4% and return on tangible equity (ROTE) was 11.1%, with a reduction of 80 basis points in ROE due to selected items [4][12] Business Line Data and Key Metrics Changes - Global Banking and Markets generated revenues of $8.6 billion, with advisory revenues of $875 million, up both sequentially and year-over-year [13] - FIC net revenues were $3 billion, down from the previous year, but financing revenues reached a record $949 million, up 30% year-over-year [14] - Equities net revenues were $3.5 billion, an 18% increase year-over-year, with intermediation revenues up 29% [14] - Asset and Wealth Management revenues were $3.8 billion, up 16% year-over-year, with management and other fees reaching a record $2.6 billion [15] Market Data and Key Metrics Changes - Total assets under supervision reached a record of $3.1 trillion, with significant inflows across asset classes [17] - Alternative assets under supervision totaled $328 billion, contributing to $527 million in management fees [17] Company Strategy and Development Direction - The company aims to strengthen its leadership in Global Banking and Markets while focusing on growth opportunities in Asset and Wealth Management [22] - There is a commitment to reducing the consumer footprint, which is expected to enhance overall returns [11][63] Management's Comments on Operating Environment and Future Outlook - The U.S. economy shows resilience, with decreasing inflation and supportive unemployment data, leading to optimism for increased economic activity [9] - Management expressed confidence in the trajectory of the company, emphasizing the strength of client relationships and the ability to adapt to regulatory changes [10][26] Other Important Information - The company returned $2 billion to shareholders, including dividends and stock repurchases, and maintained a common equity Tier 1 ratio of 14.6% [20] - The firm is focused on improving the durability of its revenue base and expects to exceed $60 billion in fundraising for 2024 [8][20] Q&A Session Summary Question: Comments on regulatory perception of trading - Management acknowledged the challenges of regulatory environments but emphasized the strength and adaptability of their market business [24][26] Question: Competitive threats from non-bank trading venues - Management noted that while competition exists, their integrated services and client relationships position them well against new entrants [32][33] Question: Path to achieving mid-teens ROE - Management outlined the need for continued execution in Global Banking and Markets and improvements in Asset and Wealth Management to reach mid-teens ROE [35][36] Question: Strength in Private Banking - Management highlighted the strategic decision to increase lending to ultra-high net worth clients, which is expected to drive growth [42][44] Question: Update on the GM card platform - Management confirmed the transition is signed but not yet closed, with ongoing operating losses expected until the transfer is complete [55][56] Question: Investment backlog and sponsor activity - Management indicated that while M&A activity is below historical averages, there is potential for increased sponsor activity in the near future [50][58] Question: Fee rates in alternative asset management - Management acknowledged that fee rates can vary based on the mix of assets and emphasized the importance of scale in driving margins [67][69]