Goldman Sachs(US:GS)2024-02-27 16:15Financial Data and Key Metrics Changes - The firm has compounded financing revenues in its FICC and Equities business by 15% since 2019, indicating a strong growth trajectory in client financing [5] - Durable revenues, which include management and financing fees, have reached approximately $20 billion, growing at a compounded rate of 13% since 2019 [25][26] Business Line Data and Key Metrics Changes - The Banking & Markets franchise has increased wallet share by over 350 basis points, positioning the firm as a clear leader in this sector [5] - The firm has made significant progress in Asset Management and Wealth Management, with the ultra-high net worth business growing over 10% annually [54] Market Data and Key Metrics Changes - The service economy in the U.S. remains strong, particularly in the upper half, while consumer behaviors in the lower tier are softening [10] - The firm anticipates a return to more normalized investment banking activity, which has been below 10-year averages recently [16][17] Company Strategy and Development Direction - The company is focusing on two core businesses: Banking & Markets and Asset & Wealth Management, aiming for mid-teen returns through the cycle [39][40] - The firm has narrowed its consumer business strategy, recognizing that previous expectations were not met [6] Management's Comments on Operating Environment and Future Outlook - The management views the macro environment as uncertain, with potential for a soft landing but acknowledges fragility due to geopolitical issues [11][12] - The firm is well-positioned for future growth, with a strong talent pool and a simplified business structure [72] Other Important Information - The firm has raised $250 billion in alternatives over the past five years and expects to raise an additional $40 billion to $50 billion this year [43] - The firm is committed to improving its efficiency ratio, which has been higher than 60% [62] Q&A Session Summary Question: Reflections on CEO's Experience - The CEO reflected on the challenges and accomplishments over the past 5.5 years, emphasizing the importance of adapting to unexpected events like the pandemic [3][4] Question: Perspective on the Macro Environment - The CEO discussed the resilience of the macro environment, noting the impact of fiscal stimulus and the mixed performance of different economic tiers [9][10] Question: Opportunities in Major Businesses - The CEO highlighted the need for caution in assessing opportunities, particularly in investment banking, which has seen anemic activity but is expected to normalize [15][16] Question: Drivers of Asset & Wealth Management Margins - The CEO outlined the growth in management fees and the potential for higher margins in the Asset Management business [41][45] Question: Future of Private Credit - The CEO expressed confidence in the firm's position in private credit, citing a significant opportunity for growth [47][52] Question: Wealth Management Growth Drivers - The CEO emphasized the growth potential in the ultra-high net worth segment, which has shown strong performance [54][56] Question: Managing Expense Base - The CEO discussed the firm's approach to managing expenses and the expectation of improved operating leverage moving forward [64][66]