Q3 2023 Goldman Sachs Group Inc Earnings Call

October 17, 2023

We have a Goldman Sachs I will begin the call with the following disclaimer.

The earnings presentation can be found on the Investor Relations page of our website and contains information on forward looking statements and non-GAAP measures.

This audiocast is copyrighted material of the Goldman Sachs Group, Inc, and may not be duplicated reproduced or rebroadcast without our consent.

This call is being recorded today October 17th 2023, I will now turn the call over to Chairman and Chief Executive Officer, David Solomon and Chief Financial Officer, Dennis Coleman. Thank you. Mr. Sullivan you may begin your conference.

Good morning, My name is Karen and I will be your conference facilitator today I would like to welcome everyone to the Goldman Sachs third quarter 2023 earnings Conference call.

Thank you very much and good morning, everybody.

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 our website and contains information on forward looking statements and non-GAAP measures. This audiocast is copyrighted material of the Goldman Sachs Group, Inc, and may not be duplicated reproduced or rebroadcast without our COO.

Thank you all for joining us before I start my prepared remarks, I, just like to take a moment to address the horrific events in the middle East.

We condemn the terrorist attacks against Israel in the strongest possible terms and are heartbroken by the loss of so many innocent lives.

This is clearly an extremely difficult and uncertain time for the region.

And it's very concerning for many of us around the world.

Since.

Obviously, we'll continue to watch closely as this crisis unfolds.

Earlier. This month marked the end of my fifth year as CEO of Goldman Sachs.

I've never felt more optimistic about the firm and our strategy has never been more clear.

Thank you very much and good morning, everybody and.

We operate two core businesses are market, leading banking markets franchise.

Thank you all for joining us before I start my prepared remarks, I, just like to take a moment to address the horrific events in the middle East.

And our growing asset and wealth management platform.

Both of which are being positioned to deliver mid teen returns through the cycle.

We can down the terrorist attacks against Israel in the strongest possible terms and are heartbroken by the loss of so many innocent lives.

As I reflect on the past five years.

Much of what has always made Goldman Sachs extraordinary remains the same.

This is clearly an extremely difficult and uncertain time for the region and it's very concerning for many of us around the world.

Long track record of being a trusted advisor the world's leading businesses institutions and individuals.

We obviously will continue to watch closely as this crisis unfolds.

Global broad and deep platform with capabilities that span across products geographies and solutions.

Earlier this month I'm Mark the end of my fifth year as CEO of Goldman Sachs.

I've never felt more optimistic about the firm and our strategy has never been more clear.

And aspirational brand.

Exceptional people.

And a culture of collaboration and excellence.

We operate two core businesses are market, leading banking markets franchise.

Additionally over this time, we have evolved the organization by Institutionalizing, a one Goldman Sachs operating ethos.

And our growing asset wealth management platform.

Both of which are being positioned to deliver mid teen returns.

This approach coupled with our best in class talent advice and execution capabilities as <unk>.

Mike.

As I reflect on the past five years much of what has always made Goldman Sachs extraordinary remains the same.

Strengthened and solidified our leadership positions across our businesses.

As we sit here today, our client franchise is as strong as ever enabling us to remain at the center of the most complex and important transactions for our clients.

A long track record of being a trusted advisor to the world's leading businesses institutions and individuals.

A global broad and deep platform with capabilities that span across products geographies and solutions.

For example, the IPO market has started to reopen.

Since labor day there've been for marquee Ipos priced in the United States arm holdings into the cart Claudio and birkenstock.

Aspirational brand.

Exceptional people.

And our culture of collaboration and excellence.

Goldman Sachs was lead left on three of those four and the joint lead book runner on the floors.

Additionally over this time, we have evolved the organization by Institutionalizing, a one Goldman Sachs operating ethos.

No other bank can make that claim.

This approach coupled with our best in class talent advice and execution capabilities.

Being entrusted to help companies navigate the critical transition of coming to market requires long standing client relationships.

Strength and solidified our leadership position across our businesses.

Deep market expertise and experience.

As we sit here today, our client franchise is as strong as ever.

Given the execution of these transactions I am encouraged by the prospects of a wider reopening of capital markets.

Willing us to remain at the center of the most complex and important transactions for our clients.

If conditions remain conducive I expect the continued recovery for both capital markets and strategic activity.

For example, the IPO market has started to reopen.

As a leader in M&A advisory and equity underwriting a resurgence in activity could be a tailwind Goldman Sachs.

Labor day there've been for marquee Ipos priced in the United States arm holdings in the cart Claudio and Birkenstock.

And asset and wealth management, our strategy is working as evidenced by the successes we've seen across our franchise.

It's actually the lead left on three of those four and the joint lead book runner on the fourth.

No other bank can make that claim.

While some active asset managers have faced quarterly outflows over the last few years, we posted our 20 <unk> consecutive quarter of long term fee based inflows.

Entrusted to help companies navigate the critical transition coming to market requires long standing client relationships.

Deep market expertise and experience.

We generated record management and other fees of $2 4 billion and are well on our way of achieving our $10 billion annual target for 2024.

Given the execution of these transactions I'm encouraged by the prospect of a wider reopening of capital markets.

We're also ahead of pace on our $2 billion target for alternatives management fees.

If conditions remain conducive I expect the continued recovery for both capital markets and strategic activity.

While our market leading client franchise allows us to execute from a position of strength. We know we still have work ahead of us.

As a leader in M&A advisory and equity underwriting a resurgence in activity would be a tail of Goldman Sachs.

Earlier this year at Investor Day, we laid out a clear set of goals to narrow our strategic focus and we've made significant progress on these priorities.

And as it wealth management, our strategy is working as evidenced by the successes we've seen across our franchise.

Well some active asset managers are paid quarterly outflows over the last few years, we posted our 23rd consecutive quarter long term fee based inflows.

Most recently, we announced the sale of Green Sky.

We also announced the sale of personal financial management this summer.

Both substantially all of our markets loan portfolio we.

We generated record management and other fees of $2 $4 billion and are well on our way of achieving our $10 billion annual target.

We've reduced our historical principal investments by $9 billion this year.

We are confident that the work we're doing now provides us a stronger platform for 2024 and beyond.

Before we.

We are also ahead of pace on our $2 billion target alternatives management fees.

As I assess the operating backdrop the U S economy has proven to be more resilient than expected, though there are reasons to remain vigilant.

Our market, leading client franchise allows us to execute from a position of strength. We know we still have work ahead of us.

Treasury rates have risen sharply over the past few months with 10 year yields up 75 basis points in the third quarter.

Earlier this year at Investor Day, we laid out a clear set of goals to narrow our strategic focus and we've made significant progress on these priorities.

On top of that recent inflation unemployment data has come in above estimates driving market expectation of higher for longer interest rates.

Most recently, we announced the sale Green Sky.

We also announced the sale of personal financial management this summer.

So substantially all of our markets loan portfolio.

And there still are a number of sectors in the economy that have yet to absorb the impact of higher rates, especially in light of the further tightening of financial conditions, we've seen over the last quarter.

We've reduced our historical principal investments by $9 billion this year.

We are confident that the work we're doing now provides us a stronger platform for 'twenty 'twenty four and beyond.

At the same time, there's been an escalation of geopolitical stresses around the globe.

So that's the operating backdrop the U S economy has proven to be more resilient than expected, though there are reasons to remain vigilant.

If we can do more in Ukraine.

Tensions with China and now the conflict in the Middle East overall levels of risk are more elevated than we've seen in quite some time.

Treasury rates have risen sharply over the past few months with 10 year yields up 75 basis points in the third quarter.

While we don't know where this will all lead it could impact economic growth and stability in the U S and around the world.

On top of that recent inflation unemployment data has come in above estimates driving market expectation all the higher for longer interest rates.

And we remain cautiously position.

Before I turn it over to Dennis I'd like to spend a moment of Basel III and gained proposal and reiterate my views on it.

And there still are a number of sectors in the economy that have yet to absorb the impact of higher rates, especially in light. The further tightening of financial conditions, we've seen over the last quarter.

We of course support sensible regulation and the desire to ensure we have a safe and sound financial system.

At the same time, there's been an escalation of geopolitical stresses around the globe.

There is some have recently said we need to address the lessons from the 2008 financial crisis, which is driving the need for much higher regulation.

Worn Ukraine.

Tensions with China and now the conflict in the middle East overall levels of risk more elevated than we've seen in quite some time.

But frankly speaking the rules as proposed.

Way too far and do not account for the vast array of improvements made by the largest banks as a result of Dodd Frank and other reforms.

Well, we don't know where this will all lead it could impact economic growth and stability in the U S and around the world and we remain cautiously position.

Not only a bank doubled capital left over the last 15 years to improve the quality of capital increased liquidity simplified businesses that have been subjected to ongoing annual stress tests.

Before I turn it over to Dennis I'd like to spend a moment of Basel III Young game proposal and reiterate my views on it.

We of course support sensible regulation and the desire to ensure we have a safe and sound financial system.

Wiring too much capital will have negative consequences.

I believe if these rules are implemented three things will happen.

There were some have recently said we need to address the lessons from the 2008 financial crisis, which is driving the need for much higher regulations, but frankly speaking rules as proposed.

First the cost of credit will go up for businesses of all size from large corporations to small businesses.

More activity will move to the unregulated shadow banking sector policies and incentivize the risk of <unk>.

Way too far do not account for the vast array of improvements made by the largest banks as a result of Dodd Frank and other reforms.

<unk> risk outside the regulated banking system could in fact increased systemic risk.

Third U S competitiveness will go down our capital markets are the deepest and most liquid in the world. They are the engine of our economy is access to capital allows for innovation and growth across the country, our competitive standing as a leading global economy will be negatively impacted by this proposal.

I'll leave that doubled capital left over the last 15 years, we've improved the quality of capital increase liquidity simplified businesses that have been subjected to ongoing annual stress tests.

Wiring too much capital will have negative consequences I believe that these rules are important I did three things will happen.

The net result, these proposed rules would be slower economic growth in the U S material improvement in the.

First the cost of credit will go up for businesses of all sizes from large corporations to small businesses.

It sounds as the banking system.

Alongside clients and others in the industry are engaging heavily with our regulators and government stakeholders and given this engagement, we expect that there will be ongoing debate and ultimately changes to the proposed rules.

Second more activity will move to the unregulated shadow banking sector policies and incentivize the risk transfer.

Transfer of risk outside the regulated banking system could in fact increased systemic risk.

The regulatory uncertainty and geopolitical risks remain top of mind I feel very confident about the state of our client franchise and the long term opportunity for Goldman Sachs.

Third U S competitiveness will go down our.

Capital markets are the deepest most liquid in the world. The engine of our economy is access to capital allows for innovation and growth across the country, our competitive standing as a leading global economy would be negatively impacted by this proposal.

We are focused on the execution of our strategy to further strengthen our leading global banking and markets franchise and grow our asset and wealth management business I.

I feel good about the relative performance in our core business and we remain firmly committed to delivering for clients and shareholders.

Net result, these proposed rules would be slower economic growth in the U S material improvement.

It sounds as the banking system.

I will now turn it over to Dennis to cover financial results for the quarter.

Alongside clients and others in the industry I've been engaging heavily with our regulators and government stakeholders and given this engagement, we expect that there will be ongoing debate and ultimately changes to the proposed rules.

Thank you David good morning.

Start with our results on page one of the presentation in the third quarter, we generated net revenues of $11 8 billion.

Net earnings of $2 1 billion.

So regulatory uncertainty and geopolitical risks remain top of mind I feel very confident about the state of our client franchise and the long term opportunity for Goldman Sachs. We're focused on the execution of our strategy to further strengthen our leading global banking and markets franchise and grow our asset and wealth management business I feel good about the relative performance in our core.

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40.

And a return on equity of seven 1%.

As David highlighted earlier this year, we made the strategic decision to narrow our focus and we've made strong progress across a number of activities we provide.

Details on the financial impact related to these decisions in the selected items table.

In aggregate these items reduced net earnings by $828 million EPS by $2 41.

Business, and we remain firmly committed to delivering for clients and shareholders.

Now I'll turn it over to Dennis to cover financial results for the quarter.

And our ROE by three one percentage points.

Thank you David good morning.

These items include.

Let's start with our results on page one of the presentation in the third quarter. We generated net revenues of $11 8 billion net earnings of $2 1 billion, resulting in a tariff all 40 cents and a return on equity of seven 1%.

Results related to our historical principal investments with an asset and wealth management, including the net impact of March sell downs, and Cie impairments as well as results relating to Green Sky, which includes the impact of our announced sale and ongoing operating results. Additionally.

As David highlighted earlier this year, we made the strategic decision to narrow our focus and we've made strong progress across a number of activities.

Additionally, we highlight modest ongoing losses in connection with our residual markets portfolio and operating the PFM business.

Turning to performance by segment starting on page four.

We provide details on the financial impact related to these decisions in the selected items table.

Global banking and markets produced revenues of $8 billion in the third quarter.

In aggregate these items reduced net earnings by $828 million EPS by $2.41 and our ROE by three one percentage points.

Advisory revenues of $831 million were down versus a strong prior year period amid lower completions.

Equity underwriting revenues rose year over year to $308 million, though.

These items include.

Three volumes remained well below medium and longer term averages.

Debt underwriting revenues of $415 million also rose versus the third quarter of 2022.

For the year to date, we ranked number one in the league tables across announced and completed M&A as well as equity underwriting and ranked number two in high yield debt.

Additionally, we highlight modest ongoing losses in connection with our residual markets portfolio and operating the PFM business.

Our backlog fell quarter on quarter as we successfully brought transactions to market.

Turning to performance by segment starting on page four.

Global banking and markets produced revenues of $8 billion in the third quarter.

Though market conditions are dynamic client engagement continues to be elevated and our best in class franchise remains well positioned to support the needs of our clients as they access the capital markets.

Advisory revenues at $831 million were down versus a strong prior year period amid lower completions.

Equity underwriting revenues rose year over year to $308 million, though industry volumes remained well below medium and longer term averages.

<unk> net revenues were $3 4 billion in the quarter down from a strong performance last year, particularly in currencies commodities and up relative to the second quarter.

Debt underwriting revenues of $415 million also rose versus the third quarter of 2022.

We produced record <unk> financing revenues of $730 million, which rose sequentially on better results within mortgages in structured products. Additionally.

For the year to date, we ranked number one in the league tables across announced and completed M&A as well as equity underwriting and ranked number two in high yield debt.

Additionally, we were pleased to win the bids for two pools of signature bank capital call facilities totaling just over 15 billion in commitments that were held for auction by the FDIC in September.

Backlog fell quarter on quarter, as we successfully brought transactions to market.

As we spoke about at our Investor day alternative asset managers aren't attractive clients up for us and the purchase of this portfolio allows us to increase our connectivity with its client base.

Though market conditions are dynamic by engagement continues to be elevated and our best in class franchise remains well positioned to support the needs of our clients as they access the capital markets.

So we can serve even more holistically with our one Goldman Sachs approach.

Net revenues were $3 4 billion in the quarter down from a strong performance, while posture, particularly in currency and commodities and up relative to the second quarter.

These activities also enable us to grow durable revenues at attractive risk adjusted returns.

Equities net revenues were $3 billion in the quarter equities intermediation revenues of $1 7 billion rows.

We produced record fixed financing revenues of $730 million, which rose sequentially on better results within mortgages with structured products. Additionally.

<unk>, 7% year over year on better performance in derivatives, while equities financing revenues of $1 2 billion were lower versus a record quarter.

Additionally, we were pleased to win the bids for two pools of signature bank's capital call facilities totaling just over 15 billion in commitments that were held for auction by the FDIC in September .

Financing revenues across FIC and equities.

It's $1 billion for the year to date, representing a record performance for these more durable activities our financing results combined with the substantial share gains we've made since our first investor day are the direct result of the successful execution of our stated strategic priorities for this business.

As we spoke about at our Investor day alternative asset managers aren't attractive clients up for us and the purchase of this portfolio allows us to increase our connectivity with its client base.

Well, we can serve even more holistically with our one Goldman Sachs approach.

These activities also enable us to grow durable revenues at attractive risk adjusted returns.

We are raising the floor and global banking and markets as reflected by our year to date ROE of 13, 4% despite muted activity levels across investment banking.

Equities net revenues were $3 billion in the quarter equities intermediation revenues of $1 $7 billion rose, 7% year over year on better performance in derivatives, while equities financing revenues of $1 2 billion were lower versus a record second quarter.

Now moving to asset <unk> wealth management on page five.

Revenues of $3 2 billion were lower year over year, primarily driven by weaker results in equity investments management and other fees increased 7% year over year to a record $2 4 billion.

Financing revenues across FIC, and equities were near $1 billion for the year to date, representing a record performance for these more durable activities. Our financing results combined with the substantial share gains we've made since our first investor day are the direct result of the successful execution of our stated strategic priorities for this business.

Largely driven by higher average assets under supervision.

Private banking and lending revenues were $687 million.

Up slightly year on year as higher deposit balances and spreads were offset by our sale of substantially all of the markets loan portfolio.

We are raising the floor and global banking and markets as reflected by our year to date ROE of 13.4% despite muted activity levels across investment banking.

We were very focused on driving growth in the more durable revenue streams with management and other fees as well as private banking and lending.

Both of which generated record revenues for the year to date period.

Now moving to asset and wealth management on page five.

Equity investments generated net losses of $212 million driven by markdowns on investments in commercial real estate.

Revenues of $3 $2 billion were lower year over year, primarily driven by weaker results in equity investments management and other fees increased 7% year over year to a record $2 $4 billion, largely driven by higher average assets under supervision.

In aggregate the losses from our historical principal investments as well as the results from Marcus loans negatively impacted our 6% pre tax margin for the segment by 18 percentage points for the year to date.

Private banking and lending revenues were $687 million.

Now moving to page six.

Total assets under supervision ended the quarter at two seven trillion.

Up slightly year on year as higher deposit balances and spreads were all set by our sale of substantially all of the markets La Colina.

We saw $11 billion of liquidity inflows and 7 billion of long term net inflows, representing our 20 <unk> consecutive quarter of long term fee based inflows.

We were very focused on driving growth in the more durable revenue streams with management and other fees as well as private banking and lending.

Turning to page seven on alternatives.

Both of which generated record revenues for the year to date period.

Alternative <unk> totaled $267 billion at the end of the third quarter, driving $542 million management and other fees for the quarter.

Equity investments generated net losses of $212 million driven by markdowns on investments in commercial real estate.

Gross fundraising was $15 billion for the quarter and $40 billion for the year to date, we were pleased to announce the close of Goldman Sachs Vintage fund nine in the third quarter, our largest private equity Secondaries fund and one of the largest in history at approximately $14 billion.

In aggregate the losses for historical principal investments as well as the results are Marcus loans negatively impacted our 6% pre tax margin for the segment by 18 percentage points for the year to date.

Now moving to page six.

Total assets under supervision ended the quarter at two seven trillion dollars.

Total third party fundraising since our 2020 Investor Day is now 219 billion, putting us well on pace to hit our $225 billion target ahead of schedule.

We saw 11 billion of liquidity inflows and 7 billion of long term net inflows, representing our 23rd consecutive quarter of long term fee based inflows.

On balance sheet alternative investments totaled approximately $49 billion.

Turning to page seven on alternatives.

Alternative <unk> totaled $267 billion at the end of the third quarter, driving 542 million as management and other fees for the quarter.

Of which roughly 21 billion is related to our historical principal investment portfolio.

In the third quarter, we reduced this portfolio by over $3 billion.

Gross their fundraising was $15 billion for the quarter and $40 billion for the year to date, we were pleased to announce the close of Goldman Sachs Vintage fund nine in the third quarter, our largest private equity Secondaries fund and one of the largest in history at approximately $14 billion.

Year to date reductions to $9 billion.

We are on track to achieve our 2024 year end target of a historical principal investment portfolio below $15 billion.

Next platform solutions to page eight.

Total third party fundraising since our 2020 Investor Day is now 219 billion, putting us well on pace to hit our $225 billion target ahead of schedule.

Revenues were $5 $7 million to $8 million.

Including a $123 million revenue reduction related to the Green Sky loan book, which was more than offset by a $637 million associated reserve release, as we move the portfolio to held for sale.

On balance sheet alternative investments totaled approximately $49 billion of which roughly 21 billion is related to our historical principal investment portfolio.

On page nine firm wide net interest income was $1 $5 billion in the third quarter down sequentially as increased funding cost supported trading activities are.

In the third quarter, we reduced this portfolio by over $3 billion, bringing year to date reductions to $9 billion. We are on track to achieve our 2024 year end target or the historical principal investment portfolio below $15 billion.

Our total loan portfolio at quarter end was 178 billion flat with the prior quarter.

Our provision for credit losses was $7 million, which reflected net charge offs in our credit card lending portfolio offset by the reserve release, I mentioned related to Green Sky.

Next platform solutions page eight.

Revenues were $578 million.

Additionally, within our wholesale portfolio impairments were partially offset by a reserve reduction that was driven by increased stability in the macroeconomic environment versus the prior quarter.

Including a $123 million revenue reduction related to the Green Sky loan book, which was more than offset by a $637 million associated reserve release, as we move the portfolio to held for sale.

On page 10, we provide additional detail on our CRE exposure similar to last quarter.

On page nine firm wide net interest income was one of the $5 billion in the third quarter down sequentially as increased funding cost supported trading activities.

CRE loans continue to represent a relatively small percentage of our overall lending book at 14%.

Our investments are diversified across geographies and positions with no single position representing more than 1% of the total on balance sheet alternative investments.

Our total loan portfolio at quarter end was $178 billion flat with the prior quarter.

Our provision for credit losses was $7 million, which reflected net charge offs in our credit card lending portfolio offset by the reserve release, I mentioned related to Green Sky.

Across both equity investments and <unk>, we have marked or impaired office related exposures by approximately 50% this year.

Now turning to expenses on page 11.

Additionally, within our wholesale portfolio impairments were partially offset by a reserve reduction that was driven by increased stability in the macroeconomic environment versus the prior quarter.

Total quarterly operating expenses were $9 1 billion our year to date compensation ratio net of provisions is 34, 5%.

On page 10, we provide additional detail on our CRE exposure similar to last quarter.

<unk> of approximately $275 million of year to date severance costs at.

CRE loans continue to represent a relatively small percentage of our overall lending book at 14%.

At Investor Day in February we articulated a goal of $600 million and run rate payroll efficiencies to be achieved in 2023 and 2024 and we are currently tracking to surpass that goal.

Our investments are diversified across geographies and positions with no single position representing more than 1% of the total on balance sheet alternative investments.

These efficiencies allow us to reinvest in our highest performing people, particularly as the market for top talent remains fiercely competitive.

Across both equity investments and C. I E. We have marked or impaired office related exposures by approximately 50% this year.

Quarterly non compensation expense.

$9 billion.

The year over year increase in non comp expenses was driven by the write down of $506 million of intangibles related to green sky as well as CIA impairments of $358 million.

Now turning to expenses on page 11.

Total quarterly operating expenses were $9 $1 billion, our year to date compensation ratio net of provisions is 34, 5%.

While onetime expenses have been elevated for the year to date, we continue to focus on bringing down non comp expenses and are making progress on our $400 million run rate efficiency goal.

<unk> of approximately $275 million of year to date severance costs at.

At Investor Day in February we articulated a goal of $600 million and run rate payroll efficiencies to be achieved in 2023 and 2024 and we are currently tracking to surpass that goal.

Our effective tax rate for the first nine months of 2023 was 23, 3% higher versus the first half due to the write off of deferred tax assets related to green Sky and the geographic mix of our earnings for the full year, we expect a tax rate of under 23%.

These efficiencies allow us to reinvest in our highest performing people, particularly as the market for top talent remains fiercely competitive.

Now on to slide 12.

Quarterly non compensation expense.

Our common equity tier one ratio was 14, 8% at the end of the third quarter under the standardized approach 180 basis points above our current capital department of 13%.

$9 billion the year over year increase in non comp expenses was driven by the write down of $506 million of intangibles related to green sky as well as Cie impairments of $358 million.

In the quarter, we returned $2 $4 billion to shareholders, including common stock repurchased $1 5 billion and common stock dividends $937 million.

While onetime expenses have been elevated for the year to date, we continue to focus on bringing down non comp expenses and are making progress on our 400 million run rate efficiency goal.

Given the uncertainty around the capital rules at this time, we expect a moderate fourth quarter share repurchases versus the third quarter, we remain committed to paying our shareholders, a sustainable growing dividend and maintaining a competitive yield.

In conclusion, our third quarter results reflect the ongoing narrowing of our strategic focus on the execution of our priorities, which will help drive our businesses to produce mid teens returns through the cycle. We are confident in our ability to deliver for shareholders, while continuing to support our clients and we remain optimistic about the future opportunity set for Goldman Sachs with that we'll now open up the line for.

Now onto slide 12.

Our common equity tier one ratio was 14, 8% at the end of the third quarter under the standardized approach 180 basis points above our current capital department of 13%.

In the quarter, we returned $2 $4 billion to shareholders, including common stock repurchased one 5 billion and common stock dividends and $937 million.

Questions.

Ladies and gentlemen, we will now take a moment to compile the Q&A roster.

If you would like to ask a question. During this time simply press Star and then the number one on your telephone keypad.

If you would like to withdraw your question. Please press star two on your telephone keypad.

In conclusion, our third quarter results reflect the ongoing narrowing of our strategic focus and the execution of our priorities, which will help drive our businesses to produce mid teens returns through the cycle. We are confident in our ability to deliver for shareholders, while continuing to support our clients and we remain optimistic about the future opportunity set for Goldman Sachs with that well now open up the line for.

If you are asking a question and you are on a hands free unit or speaker phone, we would like to ask that you use the handset when asking your question.

Please limit yourself to one question and one follow up question.

Questions.

We will take our first question from Glenn Schorr with Evercore ISI. Please go ahead.

Ladies and gentlemen, we will now take a moment to compile the Q&A roster.

Alright, thanks, so much.

I guess just big picture.

If we add back all of the significant items in the quarter.

We're obviously still well short of the mid teens targets.

No. This is super slow times like decade lows in investment banking and.

And during the process of hopefully reducing a lot of on balance sheet stuff. So I wonder if you could help us bridge the gap from here to there.

In the back of our mind, we also have the.

The potential for up to 25% increase in the denominator. So I wonder if you could bridge the gap of like how much is comes do you think from improvement in cap markets activity, how much is yet to be freed up capital from the denominator.

Well take our first question from Glenn Schorr with Evercore ISI. Please go ahead.

Hi, Thanks, so much.

I guess just big picture.

I know, it's tough, but I wanted to say high level because.

If if we add back all of the significant items in the quarter.

Thanks.

Yeah.

Obviously still well short of the mid teens target.

Sure Glenn and I appreciate the question and so we'll keep it high level.

I know this is super slow times like decade lows in investment banking.

Separate into what we've got them, we can have a separate discussion about Basel III.

And during the process of hopefully reducing a lot of on balance sheet stuff. So I wonder if you could help us bridge the gap from here to there because we're in the back of our mind. We also have the.

But first we are we are simplifying the firm and kind of managing the firm to drive us toward the overwhelming majority of the firm to be in two core businesses, our global banking and markets franchise, which is performing very well in an environment that is not a great <unk> for that business.

The potentially 20 for up to 25% increase in the denominator. So wondering if you could bridge the gap of like how.

How much is comes do you think from improvement in cap markets activity, how much is yet to be freed up capital from the denominator.

<unk> banking activities are well below.

10 year norms, I don't think that will stay that way, but if you look at the performance of the business through nine months that business, which is kind of 7% of the firm.

No, it's tough, but I wanted to stay high level, because he says it. Thanks.

Okay.

Sure Glenn and I appreciate the question and so we'll keep it high level.

That is two thirds to 70% of the firm that business is operating with a 13, 4% Roe and.

Separate into what we've got then we can have a separate discussion about Basel III.

In an environment that is not the best environment for that overall business.

But you know first we are we are simplifying the farm and kind of managing the firm to drive us toward the overwhelming majority of the firm to be in two core businesses, our global banking and markets franchise, which is performing very well in an environment, that's not a great environment for that business.

I can't tell you when the environment will get better, but I do believe that the capital markets and banking environment will improve.

In the coming years history tells us that it doesn't stay short it doesn't stay closed for multiple years at a time there was an adjustment we're making the adjustment yes, the world's uncertain as we mentioned that could be a headwind, but I do think it will improve and that business performs well and we firmly believe that that business in the mid teens through the cycle business.

Investment banking activities are well below.

I you know 10 year norms, I don't think that will stay that way, but if you look at the performance of the business through nine months that business, which is kind of 7% of the firm.

The way, we have materially grown our wallet shares the way, we've grown our financing footprint, which adds more balanced the business and with our market leading franchises across that business.

That is two thirds to 70% of the firm that business is operating with a 13, 4% Roe.

In an environment that is not the best environment for that overall business.

We have the asset and wealth management business, which we believe is mid teens or higher returns as we reduced the historical principle.

I can't tell you when the environment will get better, but I do believe that the capital markets and banking environment will improve in.

And make it a lower capital the business.

In the coming years history tells us that it doesn't stay short it doesn't stay closed for multiple years at a time there was an adjustment we're making the judgment, yes, the world's uncertain as we mentioned that could be a headwind, but I do think it will improve in that business performs well and we firmly believe that that business is a mid teens through the cycle business.

On that journey, I think youll see us, making progress we've talked about how we've reduced the historical principal businesses.

Circle principal investments by $9 billion. This year, we set a target for $15 billion by next year, which will meet and then close to zero two years later and so that business. We have a high degree of confidence will operate at mid teens or higher as we reposition it as.

The way, we have materially grown our wallet shares the way, we've grown our financing footprint, which adds more balanced the business and with our market leading franchises across that business.

We've also stated we're reducing the drag in our platforms, we're narrowing the platforms and reducing the drag and we're relatively confident that over the next 12 to 24 months will make materially more progress on that so you add that up with what we have.

We have the asset and wealth management business, which we believe is mid teens or higher returns as we reduced the historical principle.

And make it a lower capital the business well.

And I think you can get very comfortable with the mid teens target now the Basel rules. The Basel rules. If they were implemented as their position now would be a headwind to that but also that doesn't account for how we optimize and how we pass through pricing.

On that journey, I think youll see us, making progress we've talked about how we've reduced the historical principal businesses.

These things before.

Not to say it won't be ahead, but I don't want to speculate on what it would do to our targets until we actually understand how it's coming through and what we can do across our businesses to appropriately manage it. So we continue to be very optimistic about our view to deliver meaningfully higher returns to our shareholders and when theres more clarity on baas.

We've also stated or reducing the drag in our platforms, we're narrowing the platforms and reducing the drag and we're relatively confident that over the next 12 to 24 months will make material and more progress on that so you add that up with what we have.

So we're committed to giving you a clear picture of that view, but I wouldn't jump to a conclusion on it at this point I'm not saying you are I wouldn't jump to a conclusion on it at this point.

Okay I appreciate that one quickie follow up on your on your prepared remarks, you mentioned a number of sectors that have yet to absorb the higher rates I'm curious if you could give a little color either on which sectors or how meaningful that is I'm thinking from more of the big picture economy standpoint, but that caught my ear.

These things before.

Thanks.

Yeah.

Glen as I listen to you as I listen to you.

Play it back what I would say U S economy has been more resilient.

So you know we're committed to giving you a clear picture of that view, but I wouldn't jump to a conclusion on it at this way and I'm not saying you are I wouldn't jump to a conclusion on it at this point.

Fiscal stimulus has helped mute the material tightening of monetary conditions that's occurred.

I'm still of the belief that there has been a lag with this tightening and across a broad swath of the economy, we will see more sluggishness now that doesn't necessarily mean it has to be a recession.

Okay I appreciate that at one quickie follow up on your on your prepared remarks, you mentioned a number of sectors that have yet to absorb the higher rates I'm curious if you could give a little color either on which sectors or how meaningful that is I'm thinking from more of the big picture economy standpoint, but that caught my ear.

And certainly there is a good debate on where this all lands, but we again in the past quarter materially tightened economic condition and I just think there's a lag in most sectors of the economy, not all but most sectors of the economy and I do think over the next.

Thanks.

Yeah.

Glen as I listened to you because I listen to you you know play.

Play it back what I would say U S economy has been more resilient.

Two to four quarters.

The impact of that tightening will be more evident and will create slowdowns in some areas I am hearing as I interact with Ceos.

Stimulus has helped mute the material tightening of monetary conditions that's occurred.

I'm still of the belief that there's been a lag with this tightening and across a broad swath of the economy, we will see more sluggishness now that doesn't necessarily mean it has to be a recession.

Particularly around consumer businesses, some softness, particularly in the last eight weeks and number of behaviors I don't want to over amplifying that because I think the economy and the consumer has been more resilient, but I think that gives some watching closely.

And certainly there is a good debate on where this all lands, but we again in the past quarter materially tightened economic condition and I, just think there's a lag and most sectors of the economy not all but most sectors of the economy and I do think over the next.

Thanks, so much.

Well move to our next question from Ebrahim <unk> with Bank of America. Please go ahead.

Hey, good morning, I guess, maybe just one first follow up Dennis I, just want to make sure I heard you correct did you say you Mark your CRE exposure by 50% and CRE office.

Two to four quarters.

The impact of that tightening will be more evident and will create slowdowns in some areas I am hearing as I interact with Ceos.

And on that just give us a sense of visibility even beyond office CRE clearly, it's a very manageable issue for you, but it remains.

Particularly around consumer businesses is some softness, particularly in the last eight weeks in November .

<unk> I don't want to over amplify that because I think the economy and the consumer has been more resilient, but I think that gears of watching closely.

A source of nuisance in earnings noise, how much more do we have to go before this is kind of pin down.

Sure So yes to clarify for our CRE.

Thanks, so much.

Well move to our next question from Ebrahim <unk> with Bank of America. Please go ahead.

Ci closure in the office space, we've either marked or impair that down by about approximately 50%.

Hey, good morning I.

I guess, maybe just one first follow up Dennis I, just want to make sure I heard you correct did you say you Mark your CRE exposure by 50% and CRE office.

This year, so thats I think thats quite significant.

We started the year with.

About $15 billion of CRE alter.

And on that just give us a sense of visibility even beyond our CRE clearly, it's a very manageable issue for you, but it is it means.

Alternative investments that's been reduced now by about $5 billion.

Three quarters of that was either through paydowns or dispositions and the balanced remarks and impairments. So we're making very very significant progress against those exposures.

A source of nuisance in earnings noise, how much more do we have to go before this is kind of pin down.

If you were to look at the same set of exposures.

Sure So yes to clarify for our CRE.

On office the adjustment there through marks of impairments about 15% year to date.

D and C. I believe you're in the office space, we've either marked or impair that too but down by about approximately 50%.

So we feel we've reduced a lot of notional.

And we are appropriately reflected the valuations in those positions.

This year. So that's I think that's quite significant.

But as indicated by our targets, we intend to continue to move down move down those exposures.

We started the year with about.

About $15 billion of CRE alter.

Got it and it gives just a separate question I think the capital markets environment. It is what it is when you look at the firm over the next year or two with.

Alternative investments that's been reduced now by about $5 billion.

Three quarters of that was either through paydowns or dispositions for the balance of the remarks and impairments. So we're making very very significant progress against those exposures. If you were to look at the same set of exposures.

Maybe David really you'll see the best growth opportunities one maybe talk about the client franchise and capital markets financing is that getting better or worse and then there's a lot of talk about private credit direct lending you've talked about credit being an opportunity just give us a sense of could that be a meaningful source of growth as we think about the next year or two.

On office the adjustment there through marks or impairments about 15% year to date.

So we feel we've reduced a lot of notional.

We are appropriately reflected the valuations in those positions.

Sure so in our global banking and markets franchise.

But as indicated by our targets, we intend to continue to move down move down those exposures.

We still believe that we have opportunities with our focus on our execution to continue to grow our wallet share we expanded our focus from the top 100 accounts in the top 150 accounts and we also are expanding the granularity that we look at our accounts from the position of one two or three as opposed to just top three and so we still do see some.

Got it and it gives just a separate question me they think the capital markets environment. It is what it is when you look at the firm over the next year or two if may.

Maybe David really you'll see the best growth opportunities one maybe talk about the client franchise and cap markets financing is that getting better or worse and then there's a lot of talk about private credit direct lending you've talked about credit being an opportunity just give us a sense of could that be a meaningful source of growth as we think about the next year or two.

Wallet share opportunities, but we obviously are very strong wallet share.

That's not most significant we are seller financing for a global bank with France, and we expect to continue to grow that financing footprint and we have a plan to continue to put more financial resources towards growing that financing footprint and we do think that it has reasonable returns and it also creates a virtuous.

Sure so in our global banking and markets franchise.

Cycle for our client franchise in terms of our overall wallet share because of our significant financer with them.

When you turn to asset <unk> wealth management, I think we've been very clear at our Investor day at Mark stated. This that we think we can grow revenues in that business by high single digits that is driven by our continued growth in management fees over time and to continued growth in the wealth management sector, where we are experiencing good growth and we still see good opportunities.

Wallet share opportunities, but we obviously have very strong wallet share.

Most significantly we are seller financing for a global bank with France, and we expect to continue to grow that financing footprint and we have a plan to continue to put more financial resources toward growing that financing footprint and we do think that it has reasonable returns and it also creates a virtuous.

In wealth management to grow the franchise to grow the franchise all over the world and we've made continued good progress on that journey. When you talk about private credit we have as you know over $100 billion of private credit.

We've launched private credit vehicles, we all.

Cycle for our client franchise in terms of our overall wallet share because of our significant financer with them.

We have a very consistent when you look at global banking and markets and what we do with financing, which we think can also be at <unk>.

When you turn to asset <unk> wealth management, I think we've been very clear at our Investor Day as Mark stated, we think we can grow revenues in that business by high single digits that is driven by our continued growth in management fees over time and the continued growth in the wealth management sector, where we're experiencing good growth and we still see good opportunities.

Asset and wealth management opportunity for growth in private credit, but we would expect significant opportunity for the growth in private credit as a part of the overall growth of our asset and wealth management franchise. Those are a handful of things I'd highlight at this point.

That's helpful. Thank you.

We'll move to our next question from Christian <unk> with Autonomous Research. Please go ahead.

Good morning.

Just another one on Basel III game I appreciate that.

Do you think is going to change and all that but now that.

We've watched private credit vehicles, we are we have a very powerful system. When you look at global banking and markets and what we do with financing, which we think can also be an asset wealth management opportunity for growth in private credit, but we would expect significant opportunity for the growth in private credit as a part of the overall growth of our asset and wealth management franchise.

<unk> had a chance to digest.

The actual proposal as is any more color on.

How you think it affects the competitiveness of your markets businesses.

Are there any particular businesses that are more or less impacted and then maybe give us some color on potential mitigation actions.

So those are a handful of things I'd highlight at this point.

That's helpful. Thank you.

Sure Christian I appreciate it.

Yeah.

Talk very high level.

Well move to our next question from Christian <unk> with Autonomous research.

Because again this is a fluid but.

Obviously, if these rules went in place the way to propose they would have an effect on the businesses, but it's different from business to business.

There are certain activities that would meaningfully impact end users, whether they are corporates or individuals.

Where it would be obvious that you pass on cost <unk>.

Corporation wants to hedge.

And Comstock, we sit opposite and a.

And then uncollateralized derivatives.

I can't imagine that their desire to hedge won't still continue even if the cost of that hedge is higher obviously, it's some balance they would think about that differently there are certain businesses.

Might reduce our activity level, because with the new capital rules. The parents don't look attractive, but there are others as well.

One I'd point to that is most obvious which by the way a significant part of the impact to us would be is prime okay. There aren't a lot of alternatives for big institutions and the prime business. There are very few in Europe.

A little bit and.

And obviously the Europeans. If this was implemented this way would have an advantage, but at the end of the day. There are a handful of scale players. There are lots of scale of institutions that need that service our belief is we'd be able to optimize.

And pass on pricing in a reasonable way we'd have to look at the final rules, we would have to adjust so it will affect behavior will affect pricing will affect optimization, but I know everybody wants to jump to the clear answer I think you need to see the rules and then institutions and end users need to adapt to the new.

Reality, whatever it is and it's not by an alley that it only affects us or others in the industry. There are obviously the process of working through that.

As we haven't been asked.

Thank you that's helpful.

Maybe a question on the platform businesses here.

I just have a two part question I guess firstly.

Update us on how you're thinking about the partnership with Apple.

The economics work for Goldman and the current states or does it make sense to think about disposing of that partnership.

And then the second question is more on the credit quality and Youre seeing your credit cards.

What are you seeing in terms of credit quality in that portfolio, how does it compare to your expectations and the broader sort of credit card industry.

Alright, I will I'll start on the first part Dennis will make some comments.

On credit credit in the portfolio.

First I think we hired a gentleman named Bill Johnson, who has got decades and to help us.

And better optimize the credit card portfolio the credit card partnerships.

As we've stated to you a number of times and I'll I'll repeat it here very clearly we've worked to narrow our focus you've seen us execute around Marcus loans in Green Sky, our partnerships with Apple and GM are long term contracts and we don't have the unilateral right to exit those partnerships. So our focus at the moment is on.

Managing a better getting rid of the drag and bringing them to profitability and we're making progress both in the way, we run them and against the cost base that we put against them and.

And Bill Johnson, joining us is helping with all of that will continue as we go forward to work constructively with our partners.

And examine what's best in the long run for Goldman Sachs. While our core focus is on reducing the drag over the course of the next 12 months to 24 months and ensuring we operate them data at.

Dennis you want to comment a little bit on the credit quality that we're seeing.

What I would add.

As we obviously remain very focused on the overall credit quality of the portfolio a couple of things to bear in mind.

Consumer net charge off ratio for the quarter was five 1% down from five 8% last quarter and the total dollar amount of charge offs down as well you'll also see that our coverage ratio now stands at 13, 3%, which we think is an appropriate level given our expectations for the portfolio.

That adjustment is basically a function of green sky being removed from that ratio and so now that applies to the cards portfolio, but we feel good about where that stands right now on the overall performance of credit on the forward will continue to be focus made a number of adjustments to our credit underwriting box and we'll continue to monitor that as we as we move through the.

<unk> environment.

Great. Thank you.

Well move to our next question from Stephen Ju Bonk with Wolfe Research. Please go ahead.

Hi, Good morning, David Good morning, Dennis.

So good morning, David.

You had alluded to increased competition for talent driving some pressure on expenses I was hoping you could just speak to the commitment to deliver on the 60% efficiency goal and maybe more specifically given changes in revenue mix. Some recently announced business exits and the heightened competition you sited.

How thats going to impact your ability to deliver on that 60% if at all.

Yeah. So we continue to be committed to the 60% efficiency ratio, but as you know where we are.

We're moving through we're narrowing our focus we're moving through some things that we're trying to create more transparency on Stephen and highlight for you.

I'm going to turn to Dennis to make sure that we get the number right, but ex those one off those one off items the efficiency ratio for the corporate would have been about 66%. Okay. So putting in perspective, because I think it's important to highlight that we don't think the things that we're highlighting continue in perpetuity we're try.

To narrow the focus and when we look at our global banking and markets business and our asset and wealth management platform. We think we have the right target now that to your point, Steve about competition the competition for talent, especially the best talent remains very very strong and so we think we've got a very very good talent ecosystem I feel good about the high.

We are doing.

Just highlight that for.

For our analysts jobs out of University, we had 260000 applications for approximately 2600 jobs there were over 1 million applications for employment at Goldman Sachs.

Last year, very very aspirational desirous place to work, but the competition for talent remains high and so we will strike the right balance and making an investment in our talent you heard Dennis go out some of our efficiencies and the fact that the efficiencies allow us to make a reinvestment in some of his talent we feel good about where we are.

But we also believe that as we continue to execute on our strategy, which narrows, our focus and keeps us focused on our two core businesses of global banking and markets and asset and wealth management that the efficiency ratio target that we're hiring that we're highlighting over the next few years is a reasonable target.

That's great color and just for my follow up a broader question on the sponsor outlook.

Fundraising it's continued at a healthy clip, but p/e is facing numerous headwinds whether it's the LP denominator effect higher rates and just slower realization activity in general I was hoping you could speak to the broader outlook for the sponsor business and the implications for both the sponsor banking activity as well.

As the alternative asset management business.

Sure.

So that if broadly defined sponsor community.

Stephen which really is is the broad alternatives world.

Capital World.

First thing I'd, just say is we believe strongly that there is still a very very long term secular growth trend.

That is intact and will continue.

I think there's some very very interesting macro dynamics I believe there's over 70 trillion dollars of assets held.

By Baby Boomers that sometime in the next 20 years.

Either will be passed on to a younger generation for aggressive investment will go to taxes that will go to charitable foundations by the way charitable Foundation, who who also invest so theres a very very strong dynamic.

Good flows and a shift, especially given the size of the public markets and private asset classes and so we believe that is firmly intact.

No question that the capital raising environment is more muted than it's been I would say it was extraordinarily robust in 2020 in 2021.

Very very robust environment, where monetary policy was incredibly accommodated but theres no question that all of this investing can be successful as new vintages, and a new reset environment.

Are opened up.

Even if rates are higher and they operate higher.

One thing I know about the sponsor community as they generally make money by selling assets on the sponsor community owned an enormous portfolio of businesses and they also make money when they buy new assets. They obviously have to buy new assets at different valuations with different financing costs now and what I'd say is for the last six quarters last year.

And a half that community has been very quiet in our dialogue.

They are starting to see more interesting opportunities and I would expect in the next 12 months to 24 months the level of activity on the sponsor community will increase again, both in terms of sales. It's one of the reasons why I'm off on capital markets and our advisory accurate look forward over the course of the next four to eight quarters, but also.

In terms of new purchases.

I'm not suggesting that I'll go back to where it was in 2021 that would not be the normal but if you look at kind of 10 year historical averages and the percentage of investment banking activity. The sponsor activity would make up I would expect that youll see it go back to those averages.

And at the moment, we're well below those averages at the current point in time.

Very helpful. There thanks for taking my questions.

Our next question comes from Brennan Hawken with UBS. Please go ahead.

Good morning, David and Dennis Thanks for taking my question.

Love to start on expenses and comp and David you just spoke a little.

To this when answering Stephen's question.

But.

The comp ratio, which we saw revenue growth broadly quarter over quarter, and yet the comp ratio ticked up which is rather unusual.

For Goldman.

Dennis I know you layered in that there was nearly $300 million of severance year to date was some of that in the third quarter or was there any unusual items impacting the comp ratio or was this mostly just because of the competition for talent.

Yeah.

So in terms of the third quarter. It was very very small we've previously disclosed $260 million of severance. So there's a small amount of severance in the quarter. We just think it's important to continue to call that out and highlight it. So you can track track that over the course of the year that obviously rolls into our overall ratio in terms of that.

Thinking for the full year.

And we made the adjustment to the comp ratio in the third quarter based on what our expectations are for year end performance as well, we expect to pay our people and.

And we're looking in composition.

Yes.

Being mindful that we continue to pay for performance, but also recognizing in particular across our core businesses, we have leading market shares in global banking and markets record year to date financing activity record management fees year to date record private banking and lending activities year to date and these are these are the bedrock of our business for the foreseeable future.

It's important that we continue to recognize and retain the talent associated with those businesses that are going to unlock our mid teens returns.

In the future.

Okay. Thanks for that Dennis and then when you're thinking about thanks for all the color on the CRE and the exposures when Youre thinking about these historical principal investments that you are intending to continue to sell by the end of next year.

What proportion of those are CRE or CRE related is it possible to give any color around the assets that youre looking to sell and how exposed they are to CRE or other sectors.

Sure. So I made a made a comment earlier.

If you look at aggregate CRE related on balance sheet investments and you look across asset classes like loans debt Securities equity Securities and the remaining exposure of equity in our CRE portfolio that.

In aggregate now stands at a little bit under $10 billion nine seven and down already 5 billion year to date. There are there are portions of some of those exposures that relate to our firm wide activities, our CRA obligations.

Some co invest exposures.

If you look at the.

In aggregate about 43% of the CRE on balance sheet investments is hei and Thats what were looking to sell down over time.

Great Thanks for that color.

Well move to our next question from Mike Mayo with Wells Fargo. Please go ahead.

Hi.

It's not new it's been advertised I guess, what's new is the actual losses, so looking back.

Who.

Is accountable and who pays the price for the losses.

With Green Sky, the Marcus loans, and our consumer expansion strategy that was wider than you want it to be now and then looking ahead one.

Once you eliminate what you want to eliminate both on the consumer side and principal investments how much would that alone improve.

Ro.

<unk>.

Hi, Thanks, Mike appreciate the question.

Later ship with a firm which includes myself.

Myself and the other senior leadership responsible for everything that happens here and everything.

That we do for our shareholders and for our people. So obviously, we're responsible and accountable for any decision that we make.

Said publicly before that.

I am happy that we pivoted.

As you say the pivot is not new we've made the pivot we said we were going to do certain things.

With hindsight Youll do certain things differently, we obviously reflect we learn from the things that we do but I think it's important for companies to try things for companies to learn and adapt when you. When you make a decision that you think is alarmed decision for shareholders in the firm you adjust accordingly, so we're doing that and we're moving forward.

The second part of the question was.

How much ROE improved simply by discarding of your extra principal investments.

And the remaining consumer businesses do you want to get rid of.

Well I mean, I think we've given you a bunch of a bunch of transparency, Mike just looking at that but if you look at what created a drag on ROE This quarter, 75% of the dragged ROE this quarter, where the impairments are down the historic small investments and if you look over the last two.

Two quarters, the most significant impact on ROE performance has been the historical principal investments now also there were benefits from those historical principal investments historically, but in this environment. Obviously, you don't see that we think it's a better business to release that capital and run a fund business at lower capital fund business and so on.

Driving that.

I think earlier in the call we talked about through the cycle outperformance of the banking and markets business you can see the banking markets ROE right now and also the forward ROE the asset wealth management business with less capital on it.

So you want to get rid of.

The drag from the platforms is getting smaller and over the next 12 to 24 months and it will get smaller two hopefully eradicated.

Well I mean.

I think we've given you a bunch of a bunch of transparency, Mike just looking at that but if you look at what created a drag on ROE This quarter, 75% of the dragged ROE this quarter were the impairments.

And so that'll give you a cleaner Roe.

We continue to believe it can be mid teens through the cycle.

And then what is your ability and appetite for more buybacks.

The historical principal investments and if you look over the last few quarters. The most significant impact on ROE performance has been the historical principal investments now also there were benefits from those historical principal investments historically, but in this environment. Obviously, you don't see that we think it's a better business to release that capital.

Basel III of course, but to the extent that you are discarding of the principal investments that theoretically should free up more capital for either buybacks or reinvestment elsewhere and kind of what are your plans and what are your limitations.

Yes, So I think Dennis highlighted this in the prepared remarks.

And run a fund business at lower capital fund business and so we're driving that.

We've built a pretty big cushion or buffer.

I think earlier in the call we talked about through the cycle.

Given that we successfully reduced our SCB based on actions, we're taking we think that under the stress test as we continue to reduce principal investments, we will have more benefit to SCB now obviously Basel is out there and it's uncertain. So we're at the moment operating a little bit more conservatively around that and we've highlighted that.

Performance of the banking and markets business, you can see the banking markets ROE right now and also the forward ROE the asset wealth management business with less capital in it.

Drag from the platforms is getting smaller and over the next 12 to 24 months it will get smaller two hopefully eradicated.

And so that will give you a cleaner ROE that we continue to believe it could be mid teens through the cycle.

Probably we'll be a little bit more conservative on buybacks until we have more clarity, but we will continue to buy back stock. We will continue to pay our dividend as we have clarity under this strategy there should be meaningfully more capital release, which should ultimately benefit to further buyback, but at the moment, we'd like we're going to be a little more cautious about a little bit more <unk>.

And then what is your ability and appetite for more buybacks.

Basel III of course, but to the extent that youre discarding of the principal investments that theoretically should free up more capital for either buybacks or reinvestment elsewhere kind of what are your plans and what are your limitations.

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Already around the capital rules before we plow ahead.

Alright, thank you.

Yes so.

I think Dennis highlighted this would be in the prepared remarks.

Well move to our next question from Ryan <unk> with Morgan Stanley the floor is yours.

We've built a pretty big cushion or buffer.

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Hi, good morning, Thanks for taking my question.

Given that we successfully reduced our SCB based on actions, we're taking we think that under the stress test as we continue to reduce principal investment we will have more benefit to date now obviously Basel is out there and it's uncertain. So we're at the moment operating a little bit more conservatively around that and we've highlighted that.

I wanted to follow up on the earlier questions on markets, maybe asked another way. So trading revenues are clearly extremely strong industry wallet in both fixed income and common equity is tracking well above pre pandemic levels and you've been taking share but looking forward is there any scenario related to Basel and game, where we see industry wide.

Thank you your postcode is confirmed.

Please wait while you are joined to the event there should be meaningfully more capital release, which should ultimately benefit to further buyback, but at the moment, we'd like we're going to be a little more cautious about a little bit more clarity around the capital rules before we plow ahead.

Probably we'll be a little bit more conservative on buybacks until we have more clarity, but we will continue to buy back stock. We will continue to pay our dividend and as we have clarity under this strategy there should be meaningfully more capital release, which should ultimately benefit to further buyback, but at the moment, we'd like we're going to be a little bit more cautious about a little bit more.

Such size shrank and as you think about higher for longer rates, how do you expect that that impacts the various trading businesses.

Look I think the I think the I think the intermediation activity for large institutions and corporations and governments around the world continues the growth of the government in the world.

Alright, thank you.

So I'll move to our next question from Ryan Kenny with Morgan Stanley the floor is yours.

Hi, good morning, Thanks for taking my question so.

Around the capital rules before we plow ahead.

So wanted to follow up on the earlier questions on markets, maybe asked another way. So trading revenues are clearly extremely strong industry wallet in both fixed income and common equities is tracking well above pre pandemic levels and you've been taking share but looking forward is there any scenario related to Basel and game, where we see industry.

And use the market capital World continues to grow and expand I cant and I won't speculate on exactly where the final Basel rules windup and how everyone optimizes through all that but I don't think anything is changing in intermediation and the need to finance the positions in the activity of so many of our clients has grown.

Alright, thank you.

Well move to our next question from Brian <unk> with Morgan Stanley the floor is yours.

Hi, good morning, Thanks for taking my question.

Launch size shrank and as you think about higher for longer rates, how do you.

<unk>.

And so I continue to think we're leading players that have scale and global footprint and our leading position in these markets businesses.

I think they're very well positioned in these market businesses of course, there will be ups and downs in those businesses, but I think the businesses will continue to perform very very well.

Thank you.

Our next question comes from Devin Ryan with JMP Securities. Please go ahead.

Thank you and good morning, David and Dennis.

I want to come back to wealth management.

Now that the sale personal financial management.

Paul business, but just if you can remind us how and where you want to compete in wealth management moving forward David.

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Maybe give a little more color on some of those growth opportunities you alluded to that youre seeing there across the globe. Thank you.

Yeah. So I appreciate I appreciate that question Devin our focus is on ultra high net worth management, where we have a leading franchise I'd just highlight that ultra high net worth management.

Thank you. Your postcode is confirmed please wait while you are joined to the event. Our next question comes from Devin Ryan with JMP Securities. Please go ahead.

Net worth as a wealth management.

<unk>, a very fragmented business and while we have a leading franchise.

Thank you good morning, David and Dennis.

Leading franchises kind of mid single digit share.

Hmm.

Want to come back to wealth management I.

And we have less share than that in places like Europe around the world. We've seen really good growth in Europe, we see continued growth in the U S. We have an ability as.

I know that the sale of personal financial management as a small business, but just if you can remind us how and where you want to compete in wealth management moving forward and David maybe give a little more color on some of those growth opportunities you alluded to that you're seeing there across the globe. Thank you.

As we put more resources on the ground and invest in more resources to cover clients to continue to grow that business. We've seen growth over the last five years I think we have run rate room to do that one of the decisions. We made and again. This is on focus on kind of a lesson learned is by selling United capital.

Yeah. So I appreciate I appreciate that question given our focus is on ultra high net worth management, but we have a leading franchise I just highlight the ultra high net worth management high net worth wealth management is still a very fragmented business and while we have a leading franchise.

Selling PFM, which was a small business as you highlight it allows us to take the resources and the investment we might've geared towards growing that and added to our investment in ultra high net worth growth and we think thats, a better returning business and something we're very confident that we can continue to execute on.

You know leading franchises kind of mid single digit share.

And we have less share than that you know in places like Europe around the world. We've seen really good growth in Europe , we see continued growth in the U S. We have an ability.

Okay terrific and then a quick follow up so that the $15 billion capital call facilities with signature bank. It sounds like you think that could help gain share with alternative asset managers and you framed out obviously why that's such a important customer base for Goldman Sachs. So if you can maybe just give a little flavor for.

As we put more resources on the ground and invest in more resources to cover clients to continue to grow that business. We've seen the growth over the last five years I think we have me run rate room to do that one of the decisions. We made and again. This is on focus on kind of a lesson learned is by selling the United capital.

How that's going to help drive market share and how you think about where you sit with sponsors just given how important they are.

Selling PFM, which was a small business as you highlight it allows us to take the resources and the investment we might've geared towards growing that and add it to our investment in ultra high net worth growth and we think that's a better returning business and something we're very confident that we can continue to execute on.

As a customer for Wall Street, whether you have any sense of like where you are in the top three or where you can go from three to number one or just any flavor for where your market share opportunities exist there.

Sure we have in traditional investment banking services, we have leading share with sponsors.

Okay terrific and then quick follow up so that the $15 billion capital call facilities with signature bank. It sounds like you think that could help them gain share with alternative asset managers and you framed out you know obviously why that's such a important customer base for Goldman Sachs. So if you can maybe just give a little flavor for.

Across M&A and leveraged finance.

These capital facilities.

Our key to the way they operate their business and while we've been in the business of capital facilities that is an area of growth for US an area of lending growth for us one of the things that was interesting about these portfolio is the portfolio is bring a series of new clients to us where we haven't been a lender and we haven't been engaged in this activity.

How that's going to help drive market share and just how you think about where you sit with sponsors just given how important they are.

A customer for Wall Street, you know, whether you have any sense of like where you are in the top three or where you can go from three to number one or just any flavor for where your market share opportunities exist there.

And it gives us an attachment to them. So this was an opportunity to expand in activity that we werent meaningfully again I made the comment when we were talking about the global banking and markets business financing your clients strengthens our overall position with them because the financing is important to them and so as we continue to finance sponsors.

Sure we have it in traditional investment banking services, we have leading share with sponsors.

Across M&A and leverage finance these capital facilities.

It strengthened already very strong position with the sponsor community.

Hi are key to the way they operate their business and while we've been in the business of capital facilities that is an area of growth for US an area of lending growth for us one of the things that was interesting about these portfolios is the portfolios bring a series of new clients to us where we haven't been a lender and we haven't been engaged in this activity.

Understood. Thank you.

Now I'll move to our next question from Dan Fannon with Jefferies. Please go ahead.

Thanks, Good morning, I had a question on platform solutions. So for the quarter. If we exclude the write down is this a reasonable run rate for expenses and as you think about achieving your target of profitability. In this business is this going to come more from the expense side our revenue growth.

And it gives us an attachment to them. So this was an opportunity to expand in activity that we weren't meaningfully again I made the comment when we were talking about the global banking and markets business. The NAD senior clients strengthens your overall position with them because the financing is important to them and so as we continue to finance sponsors.

You could also just given outlook for transaction banking, just given revenues were down both sequentially and year over year.

It strengthened already very strong position with the sponsor community.

Sure. Thanks, Thank you for the question.

I don't think it's the right run rate I think theres, a combinations of things that we expect.

Understood. Thank you.

Over the over the next 12 months in terms of growth in revenue.

Well move to our next question from Dan Fannon with Jefferies. Please go ahead.

The composition of the clients as well as ongoing efficiency with respect to expenses. So I think we should be outperforming any type of run rate analysis I think on transaction banking.

We've tried to explain the strategic focus for us for that business, which is to grow a higher quality.

You could also just give an outlook for transaction banking, just given revenues were down both sequentially and year over year.

Client business over the long term, we had grown quickly. We're now focused on growing with high quality clients high quality deposits as you note the revenues and the deposit balances were down slightly sequentially I think reasonably in line with the industry given some migration to other.

Sure. Thanks, Thank you for the question.

I don't think its the right run rate I think theres a combinations of things that we expect over the over the next 12 months in terms of growth in revenue.

Higher yielding opportunity sets, but we did grow our client count we remain committed to the business and we think that it works very well with our overall investment banking franchise and footprint and we think it could be a good value unlocked over the longer term for Goldman Sachs.

The composition of the clients as well as ongoing efficiency with respect to expenses. So I think we should be outperforming any type of a run rate analysis I think on transaction banking.

We've tried to explain the strategic focus for us for that business, which is to grow a higher quality.

Thanks, and as a follow up you mentioned in terms of alternatives and the fund raising that the private equity challenges, but maybe if you could talk broadly about fund raising.

Our client business over the long term, we had grown quickly. We're now focused on growing with high quality clients are high quality deposits as you note the revenues and the deposit balances were down slightly sequentially I think reasonably in line with the industry given some migration to other.

And some of the bigger funds maybe that you are in the market with today and then also as you think about the maturity of the business broadly within alternatives. How are you thinking about the contribution of incentive fees.

<unk> forward and when should we start to see those becoming more material component of the overall revenue profile.

Higher yielding opportunity sets, but we did grow our client count we remain committed to the business and we think that it worked very well with our overall investment banking franchise and footprint and we think it could be a good value unlocked over the longer term for Goldman Sachs.

So on the alternative space, our fundraising activity 15 billion in the quarter 40 billion year to date has been broad based so we have a broad based platform.

Thanks, and as a follow up you mentioned in terms of alternatives in the fund raising that the private equity challenges, but maybe if you could talk broadly about fund raising.

<unk> mentioned the secondary respond David covered some of the private credit spaces. These are big areas of interest for our clients around the world that particularly relevant we expect to continue to invest in those platforms as well as across the platform more broadly incentive fees.

It comes to come through as we get to the end of funds were in a position to start distributing carry.

Going forward and when should we start to see those becoming more material component of the overall revenue profile.

<unk> incentive fees will be lumpy it will depend on the performance of different funds, but we expect that there'll be more incentive fees next year and beyond when we laid out at Investor day, the building blocks for our performance in the segment.

So on the alternative space, our fundraising activity 15 billion in the quarter 40 billion year to date, it's been broad based so we have a broad based platform.

We put on the page not only the top line.

You mentioned the secondary respond David covered some of the private credit spaces. These are big areas of interest for our clients around the world that particularly relevant we expect to continue to invest in those platforms as well as across the platform more broadly incentive fees.

Target information that David covered earlier, but also estimated incentive fee incentive fees sort of on an annual basis. So I think that's a source of upside for us.

Well move to our next question from Gerard Cassidy with RBC. Your line is now open.

It comes to come through as we get to the end of funds were in a position to start distributing carry.

Thank you good morning, David Good morning, Dennis.

In the past you and you talked about the Ipos before that you guys were very involved with this quarter.

And in the past you've talked about green shoots and part of it was the convincing of.

Private equity owners or companies that were owned by private equity.

We put on the page not only the top line.

Target information that David covered earlier, but also estimated incentive fees incentive fees sort of on an annual basis. So I think that's a source of upside for us.

Wanted to go public they're going to have to recognize that the valuations today are far below where they were in 2021 at the peak of the cycle are you finding those conversations easier today are you finding more people are recognizing that's correct and if they want to go public they just had to ask.

Well move to our next question from Gerard Cassidy with RBC. Your line is now open.

<unk>.

Yeah, I mean I appreciate the question John I think absolutely there.

Thank you good morning, David Good morning, Dennis Dave.

<unk>, if you look at a handful of the comp.

David you in the past you and you talked about the Ipos. The four that you guys were very involved with this quarter.

<unk> that have gone public you can look at the private market valuations two years ago versus the valuation now.

But in the past you've talked about green shoots and part of it was the convincing of private equity owners or companies that were owned by private equity.

But.

I don't think those those.

Don't think those discussions are difficult I think those discussions have a real sense of realism.

They wanted to go public they're going to have to recognize that the valuations today are far below where they were in 2021 at the peak of the cycle are you finding those conversations easier today are you finding more people are recognizing that's correct and if they want to go public they just have to accept it.

And I think there are a number of companies that recognize the new environment.

We are focused on what they have to do to advance themselves strategically and Jeremy I'd just add it's actually especially helpful to have new real data points or get both those space for equities and across the leveraged finance space. So the conversations that we're having with our clients now who are looking to access the markets Theyre in <unk>.

Yeah, I mean I appreciate the question John I I think absolutely.

They are easier and you know if you look at a handful of companies that have gone public you can look at the private market valuations you know two years ago versus the valuation now.

Warmed by our leading role in insights into most of the activity. That's been accomplished in the last several weeks and so I think that is an incremental source of our optimism that we have those data points and that insight to share with clients advising them on how and when they can get to market and what types of terms and pricing.

But I I don't think those those.

I don't think those discussions are difficult I think those discussions have a a real sense of realism in them and I think there are a number of companies that recognize the new environment.

Okay very helpful and then as a follow up it's not a big line item, obviously for you folks, but can you share with us some of the color on the transaction banking area that was obviously a new business line that you guys created just how is it going so the revenues are down slightly I think sequentially, but whats going on in that line.

We are focused on what they have to do to advance themselves strategically.

Gerard I would just add it's actually especially helpful to have new real data points arc at both those space for equities and across the leveraged finance space. So the conversations that we're having with our clients now who are looking to access the markets. They are informed by our leading role in insights into most of the <unk>.

This isn't granted.

It's not a major line of business for you folks at this time.

Sure no. Thanks Gerard.

Activity that's been accomplished in the last several weeks and so I think that is an incremental source of our optimism that we have those data points and that insight to share with clients advise them on how and when they can get to market at what types of terms and pricing.

Our transaction banking activity remains strategic focus.

The revenues and the deposit balances are down slightly on a quarter over quarter basis, those things are linked.

Okay very helpful and then as a follow up it's not a big line item, obviously for you folks, but can you share with us some of the color and then transaction banking area that was obviously a new business line that you guys created just how is it going I saw the revenues were down slightly I think sequentially, but whats going on in that line of business.

We have grown our client count and we remain committed to making the investments to grow high quality balances in clients in that business over the medium to long term no change in strategy.

Thank you.

Our next question comes from Sal Martinez with HSBC the floor is yours.

Can I granted it's not a major line of business for you folks at this time.

Hi, Thanks for taking my question.

I wanted to drill down a little bit more on platform solutions I think Dennis you mentioned that this quarter isn't necessarily a great run rate for expenses or revenues, but even this quarter if I adjust for the loan markdown in the impairment. It seems like you would if my math is correct. Your P. PNR positive obviously credit costs are high.

Sure no. Thanks Gerard.

Our transaction banking activity remains strategic focus.

The revenues and the deposit balances are down slightly on a quarter over quarter basis, those things are linked.

We have grown our client count and we remain committed to making the investments to grow high quality balances in clients in that business over the medium to long term no change in strategy.

The credit card book seasoning, and you're still growing that portfolio, but if you can just help us parse through some of some of the moving parts and help us understand the glide path to getting back to or getting to.

Thank you.

Our next question comes from Sal Martinez with HSBC the floor is yours.

Close to breakeven or breakeven over the next say 24 months.

Hi, Thanks for taking my question I wanted to drill down a little bit more on platform solutions I think Dennis you mentioned that this quarter isn't necessarily a great run rate for expenses or revenues, but even this quarter if I adjust for the loan markdown in the impairment. It seems like you were my math is correct you our PNR.

Sure. Thanks also just a couple of things on glide path to help with the with the questions on the context. So rate of growth is important in a business like this that's been growing very very quickly.

And obviously taking provisions in line with seasonal we expect the growth rate for that activity has been slowing and could slow further and that has some.

Positive obviously, you know credit costs are high the credit card book seasoning, and you're still growing that portfolio, but if you can just help us parse through some of some of the moving parts and help us understand the glide path to getting back to where you're getting to.

Positive impacts and then as David mentioned, we made a strategic hire a very seasoned industry professional.

We're working very very closely with them on the overall operations of our platform we remain in discussions with our card partners.

Working carefully to improve the overall efficiency for the platform for our clients and for Goldman Sachs. I think it's a combination of the way and where we're going to grow on the forward combined with.

Close to breakeven or breakeven over the next say 24 months.

Sure Dan. Thanks also just a couple of things on glide path to help with the with the questions on the context. So you know rate of growth is important in a business like this that's been growing very very quickly.

We manage the expense and the operating efficiency.

Okay. That's helpful and just maybe a quick follow up.

And obviously taking provisions in line with seasonal we expect the growth rate for that activity has been slowing and could slow further and that has some <unk>.

<unk> mentioned the MTO net charge offs were down this quarter is that right.

And you do have a 13 three reserve coverage it does seem like.

Your.

Positive impacts and then as as David mentioned, we made a strategic hire a very seasoned industry professional and we're working very very closely with him on the overall operations of our platform. We remain in discussions with our card partners and working carefully to improve the overall efficiency for the platform for our clients and for Goldman Sachs.

Maybe closer to a scenario, where provisioning to come down quite a bit, especially under Cecil.

Maybe.

Just give us a sense of how youre feeling about the credit.

The credit outlook and is my assessment right.

You're reserving.

<unk>.

Especially if you slow down it could you could come down pretty materially over the next year to.

The combination of the way and what we're gonna grow on the forward combined with we manage the expense and the operating efficiency.

Two years.

So you have a couple of facts that are right. We did have a charge off ratio that was down sequentially quarter over quarter from 5851, and lower lower charge offs.

Okay. That's helpful and just maybe a quick follow up please.

<unk> mentioned the MTO net charge offs were down this quarter is that right.

You do have a 13 three reserve coverage it does seem like.

We are not necessarily predicting that's the ongoing path for credit in the consumer portfolio is something we are still mindful of given the environment, given the vintages and which we've originated those exposures. We do feel that the coverage ratio at 13, three is appropriate and we obviously set that based on our expected LIFO.

Your you know maybe.

Closer to a scenario, where provisioning to come down quite a bit, especially under Cecil.

Maybe just.

Just give us a sense of how youre feeling about the credit.

You know the credit outlook and this is my assessment right that.

It's life of loan losses, so as we move forward, but our expectation is we'll continue to see elevated charge offs and as you look at our reporting on that with Green Sky pulled out of the consumer line, you'll have a more pure look at the cards platform and we do expect that will show.

Your reserving.

Uh huh.

Especially if you slow down it could you could come down pretty materially over the next.

Two years.

So you have a couple of facts that are that are right. We did have a charge off ratio that was down sequentially quarter over quarter from 5851, and lower lower charge offs.

Elevated elevated charge offs.

Okay, great. Thank you.

We are not necessarily predicting that's the ongoing a path for credit in the consumer portfolio. It's something we're still mindful of given the environment, given the vintages and which we've originated those exposures. We do feel that the coverage ratio at 13.3 is appropriate and we obviously set that based on our expected life.

Our next question will return to Mike Mayo with Wells Fargo. Please go ahead.

Hi, just a clarification my prior question. So if I have this right you've reduced your P investments by 3 billion quarter over quarter.

And that allowed us to $5 billion reduction in capital allocated.

A life of loan losses, so as we move forward, but our expectations is we'll continue to see elevated charge offs and as you look at our reporting on that with Green Sky pulled out of the consumer line, you'll have a more pure luck at the cards platform and we do expect that'll show.

<unk> asset management and wealth segment, I mean is that completely correlated to get rid of the $21 billion of remaining.

Principal investments does that free up say 16 billion.

Elevated elevated charge offs.

Ballpark right.

Okay, great. Thank you.

No Mike I think when we when we started talking about the reduction of our historical principal investments overtime, we gave a number of about $9 billion of capital release.

Our next question will return to Mike Mayo with Wells Fargo. Please go ahead.

Hi, just a clarification my prior question. So if I have this right you've reduced your P investments by 3 billion quarter over quarter and that allowed at $2 5 billion reduction in capital allocated to the asset management and wealth segment I mean is that complete.

For the for the entire portfolio, so I don't think.

I'd be happy to get on with you and sort of work through your numbers, but I don't think we have 16 billion incremental on the board significantly less than that.

So how much do you have left that is once you described the 21 billion.

And that remains how much capital freed up.

Lately correlated yourself, you get rid of the $21 billion of remaining.

Yeah.

You mean on a year to date basis based on the activity that we've undertaken as a release of about $2 billion to give you a sense. So.

Principal investments does that free up say 16 billion.

Ballpark right.

Yeah.

We probably have remaining mid single digits.

No Mike I think when we when we started talking about the reduction of our horse historical principal investments overtime, we gave a number of about $9 billion of capital release.

Okay, and as far as the comp ratio should we consider.

These one time charges.

For the for the entire portfolio, so I don't think.

As part of comp or would that be excluded when we think about our models.

I'd be happy to get on with you and sort of walk through your numbers, but I don't think we have 16 billion incremental on the on the board are significantly less than that.

Yeah.

So.

We obviously have to include it for the purposes of the of the comp ratio a cool we do think of them.

So how much do you have left that it's once you described the 21 billion.

And that remains how much capital should be freed up.

As as more onetime in nature, we are as you know did a.

You mean on a on a year to date basis based on the activity that we've undertaken that's a release of about $2 billion to give you a sense. So we probably have remaining you know mid single digits.

A head count reduction earlier in this year, that's not our current expectation to repeat that if anything we think that the work we've done to right size. The firm is something that puts us in a position to now make more selective investments in our head count on the forward. So we don't expect that type of severance to repeat itself and we are taking into account is.

Okay, and as far as the comp ratio should we consider.

These one time charges.

As part of comp or would that be excluded when we think about our models.

We set the compensation ratio.

Severance payments is obviously not available to pay those.

Yeah.

So.

Remain with the phone.

We obviously have to include it for the purpose of the of the comp ratio a cool we do think of them.

Pertaining to continue to drive the franchise.

At this time there are no further questions.

As as more onetime in nature, we are as you know did a.

Ladies and gentlemen, this concludes the Goldman Sachs third quarter 2023 earnings Conference call.

A head count reduction earlier in this year, that's not our current expectation to repeat that if anything we think that the work we've done to rightsize. The firm is something that puts us in a position to now make more selective investments in our head count on the forward. So we don't expect that type of severance to repeat itself and we are taking into account is.

You for your participation you may now disconnect.

We set the compensation ratio.

Severance payments is obviously not available to pay those.

Remain with the phone.

Pertaining to continue to drive the franchise.

At this time there are no further questions ladies and gentlemen. This concludes the Goldman Sachs third quarter 2023 earnings Conference call. Thank you for your participation you may now disconnect.

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Q3 2023 Goldman Sachs Group Inc Earnings Call

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