Q1 2024 The Goldman Sachs Group Inc Earnings Call

Katie: Good morning, my name is Katie, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs first quarter 2024 earnings conference call. On behalf of Goldman Sachs, I will begin the call with the following disclaimer. The earnings presentation can be found on the investor relations page of the Goldman Sachs website and contains information on forward-looking statements and non-GAAP measures. This audio cast is copyrighted material of the Goldman Sachs Group Inc. and may not be duplicated, reproduced, or rebroadcast without consent. This call is being recorded today, April 15, 2024. I will now turn the call over to Chairman and Chief Executive Officer David Solomon and Chief Financial Officer Denis Coleman. Thank you. Mr. Solomon, you may begin your conference.

Good morning, My name is Katie and I will be your conference facilitator today I would like to welcome everyone to the Goldman Sachs first quarter 2024 earnings conference call on behalf of Goldman Sachs I will begin the call with the following disclaimer. The earnings presentation can be found on the Investor Relations page.

Of the Goldman Sachs website and contains information on forward looking statements and non-GAAP measures.

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

This call's being recorded today April 15th 'twenty 'twenty four 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.

David Solomon: Thank you, operator. Good morning, everyone.

Thank you operator, and good morning, everyone. Thank you all for joining US we feel very good about our first quarter results, which reflect the strength of our world class and interconnected franchises and the earnings power of our firm.

Denis P. Coleman: Thank you all for joining us. We feel very good about our first quarter results, which reflect the strength of our world-class and interconnected franchises and the earnings power of our firm. This performance was aided by the swift actions we took last year to narrow our strategic focus and play to our core strengths. As you can see, we are delivering on our strategy, and we are pleased with the returns we generated this quarter. As laid out in January, we have three strategic objectives.

David Solomon: Performance was aided by the Swift actions, we took last year to narrow our strategic focus and play to our core strengths.

David Solomon: As you can see we are delivering on our strategy and we are pleased with the returns we generated this quarter.

David Solomon: As laid out in January we have three strategic objectives.

David Solomon: To harness one Goldman Sachs to serve our clients with excellence, to run world-class differentiated and durable businesses, and to invest to operate at scale. Across the firm, we are effectively serving clients in what remains a complex operating environment. Looking back on the last year or so, one of the most common questions clients and investors have asked is around the timing of a broader reopening of the capital market. I've said before that the historically depressed levels of activity wouldn't last forever.

David Solomon: Harvest one Goldman Sachs to serve to serve our clients with excellence to run world class differentiated and durable businesses.

David Solomon: And to invest to operate at scale.

David Solomon: Cross the firm we were effectively serving clients in what remains a complex operating environment.

David Solomon: Looking back on the last year or so one of the most common questions clients and investors have asked is around the timing of our broader reopening the capital markets.

David Solomon: I've said before that the historically depressed levels of activity wouldn't last forever.

David Solomon: CEOs need to make strategic decisions for their firms. Companies of all sizes need to raise capital, and financial sponsors need to transact to generate returns for their investors. Where we stand today, it's clear that we're in the early stages of reopening the capital market. The first few months of 2024 saw a revigoration in new issue market access. For example, there were a number of large IPOs across geography.

David Solomon: He always need to make strategic decisions for their firms companies of all sizes need to raise capital and financial sponsors need to transact to generate returns for their investors.

David Solomon: Where we stand today, it's clear that we're in the early stages of reopening of the capital markets, but the first few months of 'twenty 'twenty four.

David Solomon: And reinvigoration new issue market access.

David Solomon: For example, where a number of large ipos across geographies and.

David Solomon: The strong reception across transactions, including the IPOs for Galderma, Reddit, and Rank, is the latest sign that investors' risk appetite is growing, and GetCapitalMarkets' tighter spreads have contributed to a constructive issuance environment and investment grade with volumes hitting a record for the first three months of the year. Additionally, refinancing was a major theme with robust high yield and institutional loan refinancing volumes. Given the more accommodative issuance backdrop, as well as the potential for increased acquisition financing alongside higher M&A activity, we expect solid levels of debt underwriting activity to continue this year.

David Solomon: The strong reception across transactions, including the Ipos for Gil Gil Dynamo read it and rank as the latest sign that investors risk appetite is growing.

David Solomon: In debt capital markets tighter spreads have contributed to a constructive issuance environment and investment grade with volumes hitting a record for the first three months of the year.

David Solomon: Additionally, refinancing was a major theme with robust high yield institutional loan refinancing volume.

David Solomon: Given a more accommodative issuance backdrop as well as the potential for increased acquisition financing alongside higher M&A activity, we expect solid levels of debt underwriting activity to continue this year.

David Solomon: With our longstanding leadership positions across the global capital markets, we have been at the forefront of helping our clients access the market, and our firm stands to benefit further as transaction volumes rise from 10-year lows. It's important to note that alongside the re-opening, we are seeing in capital markets, our intermediation businesses continue to be active in supporting our clients' needs, and we're growing financing revenues across stick and equities, which together were a record this quarter and rose 18% sequentially, all in our top tier intermediation franchise and more durable financing results are helping raise the floor in global banking and markets. Asset and Wealth Management's Assets Under Supervision rose to a new record of $2.8 trillion this quarter, which represented our 25th consecutive quarter of long-term fee-based net income. We have a diversified platform across public and private markets and are delivering solid performance across asset classes, and we continue to invest resources in growing this business. Particularly across wealth management, alternatives, and solutions, and Wealth Management, we saw significant strength this quarter with total client assets ending at $1.5 trillion. And, alternatively, we raised $14 billion in commitments to fight a more difficult fundraising environment.

David Solomon: With our long standing leadership positions across the global capital markets, we have been at the forefront in helping our clients access the markets.

David Solomon: Our firm stands to benefit further as transaction volumes rise from the 10 year lows.

David Solomon: It's important to note that alongside the reopening we're seeing in capital markets. Our intermediation businesses continue to be active in supporting our clients need.

David Solomon: And we're growing financing revenues across stick in equities, which together were a record this quarter it rose 18% sequentially.

David Solomon: All in our top tier intermediation franchise and more durable financing results are helping raise the floor and global banking and markets.

David Solomon: And as it wealth management assets under supervision rose to a new record of $2 eight trillion this quarter, which represented our 25th consecutive quarter of long term fee based net inflows.

We have a diversified platform across public and private markets and are delivering solid performance across asset classes and we continue to invest resources in growing this business.

Particularly across wealth management alternatives and solutions.

David Solomon: As management, we saw significant strength this quarter with total client assets ending at 1.5 trillion dollars.

In alternatives, we raised 14 billion in commitments, despite more difficult fundraising environment.

David Solomon: And in solutions, we continued. We saw continued demand for our outsourced CIO and SMA offers. These are all areas in which we still see significant opportunities and where we have a proven track record and a demonstrated right to win. I also want to touch on a topic coming up in virtually every client conversation I have: artificial intelligence. While there is broad consensus about the transforming potential of AI, there is an enormous appetite for perspectives on how certain aspects may play out, including the timeline for commercial impact, shape of potential regulation, impact on jobs, and where value will accrue in the ecosystem.

David Solomon: And then solutions we continued.

David Solomon: We saw continued demand for outsource CIO in SMA offerings.

David Solomon: These are all areas in which we still see significant opportunities and we have a proven track record demonstrated right to win.

David Solomon: I also want to touch on a topic coming up in virtually every client conversation I have.

David Solomon: Artificial intelligence.

David Solomon: While there is broad consensus about transforming potential of AI. There is enormous appetite for perspectives on how certain aspects may play out, including the timeline for commercial impact shape of potential regulation impact on jobs, and where value will accrue in the ecosystem. Today, we are proud to be at the forefront of advising clients.

David Solomon: Today, we are proud to be at the forefront of advising clients on these topics and how to think about potential use cases in their operations. As we look longer term, to the extent that this technology develops in line with expectations, there will be significant demand for AI-related infrastructure, and, as a result, finance, which will be a tailwind to our business. For our own operations, we have a leading team of engineers dedicated to exploring and applying machine learning and artificial intelligence applications. We are focused on enhancing productivity, particularly for our developers, and increasing operating efficiency while maintaining a high bar for quality, security, and control. Like with any emerging technology, a thoughtful approach.

David Solomon: On these topics and how to think about potential use cases in their operations.

David Solomon: We look longer term to the extent that this technology developed in line with expectation there will be significant demand for AI related infrastructure and as a result financing, which will be a tailwind to our business.

David Solomon: For our own operation, we are a leading team of engineers dedicated to exploring in applying machine learning and artificial intelligence applications.

David Solomon: We are focused on enhancing productivity, particularly for our developers and increasing operating efficiency, while maintaining a high bar for quality security and controls.

David Solomon: Like with any emerging technology, a thoughtful approach and keen eye on risk management will be crucial.

David Solomon: A keen eye on risk management will be crucial. Turning to the macro environment, we continue to be constructive on the health of the U.S. economy. The Fed most recently telegraphed three rate cuts in 2024, but last week's CPI print has lowered market expectations.

David Solomon: Turning to the macro environment, we continue to be constructive on the health of the U S economy. The fed most recently telegraph three rate cuts in 2024, but last week CPI print lowered market expectations.

David Solomon: This will continue to evolve and be highly data-dependent. I'm also mindful that U.S. equity markets are hovering near record levels at a time when we continue to see headwinds, including concerns around inflation, the commercial real estate market, and escalating geopolitical tensions around the world. This combination could slow growth.

David Solomon: This will continue to evolve and be highly data dependent.

David Solomon: I'm also mindful that U S equity markets are hovering near record levels.

At a time when we see when we continue to see headwinds, including concerns around inflation, the commercial real estate market and escalating geopolitical tensions around the world.

David Solomon: This combination could slow growth, but that said the U S economy has proven to be resilient supported by a number of factors, including government spending as well as labor force growth driven by above trend levels of immigration. So while the environment is constructive and markets expect a soft landing the trajectory still.

David Solomon: With that said, the U.S. economy has proven to be resilient, supported by a number of factors, including government spending as well as labor force growth driven by above-trend levels of immigration. Thus, while the environment is constructive and markets expect a soft landing, the trajectory is still uncertain. Nonetheless, I'm very confident about the state of our client franchise, the caliber of our people, and our Culture of Collaboration and Excellence. Every day, as I interact with the people of Goldman Sachs around the world, I am consistently impressed by their talent, capabilities, and how tirelessly they work to serve our clients. The quality of our people reinforces my conviction in the long-term opportunity set for Goldman Sachs and our ability to deliver for clients and shareholders. And I'll now turn it over to Denis to discuss our financial results for the quarter.

Uncertain.

David Solomon: Nonetheless, I'm very confident about the state of our client franchise the.

David Solomon: The caliber of our people and our culture of collaboration and Excellence every day as I interact with the people of Goldman Sachs around the world I'm consistently impressed by their talent capabilities and how tirelessly they work to serve our clients.

David Solomon: Holiday of our people reinforces my conviction longterm opportunity set for Goldman Sachs, and our ability to deliver for clients and shareholders I will now turn it over to Dennis to cover our financial results for the quarter.

Denis P. Coleman: Thank you, David. Good morning. Let's start with our results on page one of the presentation. In the first quarter, we generated net revenues of $14.2 billion and net earnings of $4.1 billion. Resulting in earnings per share of $11.58, an ROE of 14.8%, and an ROTE of 15.9%. We provide details on the financial impact of selected items in the bottom table, the aggregate of which was immaterial this quarter. Let's turn to performance by segment, starting on page 3.

Thank you David good morning.

Denis P. Coleman: Let's start with our results on page one of the presentation in the first quarter, we generated net revenues of $14 $2 billion in net earnings of $4 1 billion, resulting in earnings per share of $11.58 and <unk>.

Denis P. Coleman: ROE of 14, 8% and at R. O T E a 15, 9%.

Denis P. Coleman: We provide details on the financial impact of selected items in the bottom table the aggregate of which was immaterial this quarter.

Denis P. Coleman: Let's turn to performance by segment starting on page three.

Denis P. Coleman: Global banking and markets produced revenues of $9.7 billion in the first quarter and generated an 18% ROE on a fully allocated basis. Turning to page 4, advisory revenues of $1 billion were up versus a year ago amid higher completed transactions. We remain number one in the league tables for both announced and completed M&A. Equity underwriting revenues of $370 million and debt underwriting revenues of $699 million. Both rose significantly year over year amid an increase in industry volume. Our backlog fell quarter-on-quarter as we successfully brought transactions to market, though client engagement and dialogue remain robust.

Denis P. Coleman: Global banking and markets produced revenues of $9 $7 billion in the first quarter and generated an 18% ROE on a fully allocated basis.

Turning to page four advisory revenues of $1 billion were up versus a year ago amid higher completed transactions. We remain number one in the league tables for both announced and completed M&A.

Denis P. Coleman: Equity underwriting revenues of $370 million in debt underwriting revenues of 699 million, both rose significantly year over year amid an increase in industry volumes.

Denis P. Coleman: Our backlog fell quarter on quarter as we successfully brought transactions to market the client engagement and dialogues remain robust.

Denis P. Coleman: Thicknet revenues were $4.3 billion in the quarter, up from a strong performance last year, as our global-scaled franchise continued to serve clients amid a dynamic operating environment. Intermediation results were driven by better performance in mortgages, credit, and currency. Our long history of risk-taking acumen enabled us to effectively make markets across a number of different geographies and asset classes.

Denis P. Coleman: Net revenues were $4 $3 billion in the quarter up from a strong performance last year as our global scaled franchise continued to serve clients amid a dynamic operating environment.

Denis P. Coleman: Intermediation results were driven by better performance in mortgages credit and currencies.

Denis P. Coleman: Our long history of risk, taking acumen enabled us to effectively make markets across a number of different geographies and asset classes.

Denis P. Coleman: We produced record-thick financing revenues of $852 million, which rose sequentially, primarily on better results in repo. We remain confident in our ability to continue to grow balances and drive growth in this business over time. Equity's net revenues were $3.3 billion in the quarter. Equity's intermediation revenues of $2 billion rose 14% year-over-year on better performance and derivatives. Equity's financing revenues of $1.3 billion were modestly higher year-over-year, as record-average prime balances during the quarter were only partially offset by lower financing spreads. Moving to Asset and Wealth Management on page 5. Revenues of $3.8 billion were 18% higher year over year. Record management and other fees were up 7% year-over-year to $2.5 billion. As a reminder, we closed the sale of Personal Financial Management in November of last year, which contributed approximately $60 million in fees in the year-ago period. Incentive fees for the quarter were $88 million, up sequentially and year-over-year.

Denis P. Coleman: We produced record pick financing revenues of 852 million, which rose sequentially, primarily on better results in repo, we remain confident in our ability to continue to grow balances and drive growth in this business over time.

Denis P. Coleman: Equities net revenues were $3 3 billion in the quarter equities intermediation revenues of $2 billion rose, 14% year over year on better performance in derivatives.

Denis P. Coleman: Equities financing revenues of $1 $3 billion were modestly higher year over year as record average prime balances during the quarter were only partially offset by lower financing spreads.

Denis P. Coleman: Moving to asset and wealth management on page five.

Denis P. Coleman: Revenues of $3 $8 billion were 18% higher year over year.

Denis P. Coleman: Record management and other fees were up 7% year over year to $2 $5 billion.

Denis P. Coleman: As a reminder, we closed the sale of personal financial management in November of last year, which contributed approximately 60 million in fees in the year ago period.

Denis P. Coleman: Incentive fees for the quarter were $88 million up sequentially and year over year based on our bottoms up analysis, we expect to reach our target of $1 billion in annual incentive fees over the medium term supported by an estimated $3 8 billion of unrecognized incentive fees as of year end.

Denis P. Coleman: Based on our bottoms-up analysis, we expect to reach our target of $1 billion in annual incentive fees over the medium term, supported by an estimated $3.8 billion of unrecognized incentive fees as of year-end. Private banking and lending revenues were $682 million, up substantially as revenues in the prior year period were negatively impacted by the partial sale of our Marcus Loan Portfolio. Equity Investments and Debt Investments revenues totaled $567 million. In equity investments, we saw improved performance year over year in our private portfolio that was largely offset by a markdown on a large public position. Now moving to page six.

Denis P. Coleman: Private banking and lending revenues were $682 million up substantially as revenues in the prior year period were negatively impacted by the partial sale of our Marcus loan portfolio.

Equity investments in debt investments revenues totaled $567 million.

Denis P. Coleman: And equity investments, we saw improved performance year over year in our private portfolio that was largely offset by a mark down on a large public position.

Denis P. Coleman: Now moving to page six.

Denis P. Coleman: Total assets under supervision ended the quarter at a record $2.8 trillion. We had $24 billion of long-term net inflows, largely in fixed income, representing our 25th consecutive quarter of long-term fee-based inflows. Turn to page 7 for alternatives.

Total assets under supervision ended the quarter at a record 2.8 trillion dollars, we had $24 billion of long term net inflows largely in fixed income representing our 25th consecutive quarter of long term fee based inflows.

Denis P. Coleman: Turning to page seven on alternatives.

Denis P. Coleman: Alternative Assets Under Supervision totaled $296 billion at the end of the first quarter, driving $486 million in management and other fees. Roche's third-party fundraising was $14 billion in the. We continue to expect to raise between $40 and $50 billion in alternatives across private equity and other strategies this year. More broadly, we are leveraging our longstanding leadership position in private credit to capitalize on this secular growth opportunity and expect to grow our assets from roughly $130 billion to $300 billion over the next five years. On the balance sheet, alternative investments total approximately $44 billion. In the first quarter, we reduced our historical principal investment portfolio by $1.5 billion to $14.8 billion. We expect reductions at roughly this pace for the rest of 2024 and expect to sell down the vast majority of our HPI portfolio by the end of 2026, consistent with our target. Next, platform solutions on page 8.

Denis P. Coleman: Turning to the assets under supervision totaled $296 billion at the end of the first quarter driving 486 million in management and other fees.

Denis P. Coleman: <unk> third party fundraising was $14 billion in the quarter, we continue to expect to raise between 40 and 50 billion in alternatives across private equity and other strategies this year.

More broadly we are leveraging our long standing leadership position in private credit to capitalize on the secular growth opportunity and expect to grow our assets from roughly 130 billion to 300 billion over the next five years.

Denis P. Coleman: On balance sheet alternative investments totaled approximately $44 billion in.

Denis P. Coleman: In the first quarter, we reduced our historical principal investment portfolio by $1 $5 billion to $14 8 billion.

Denis P. Coleman: We expect reductions at roughly this pace for the rest of 2024 and expect to sell down the vast majority of our API portfolio by the end of 2026 consistent with our target.

Denis P. Coleman: Next platform solutions on page eight revenues were 698 million.

Denis P. Coleman: Revenues were $698 million. Overall, segment profitability has improved, with a pre-tax net loss of $117 million for the quarter. In line with our target, we expect to drive this business to pre-tax break-even next year. On page 9, firm Y net interest income was $1.6 billion in the first quarter, up sequentially on an increase in interest earning assets. Our total loan portfolio at quarter-end was $184 billion, roughly in line with the fourth quarter, as an increase in other collateralized lending was partially offset by the sale of the remaining Green Sky portfolio. Our provision for credit losses was $318 million, which reflected net charge-offs in our credit card lending portfolio. Within our wholesale portfolio, impairments trended modestly lower versus the levels in the last few quarters. Turning to page 10, we continue to provide additional information detailing our CRE exposure.

Denis P. Coleman: Overall segment profitability has improved with a pretax net loss of $117 million for the quarter.

In line with our target we expect to drive this business to pretax breakeven next year.

Denis P. Coleman: On page nine firm wide net interest income was $1 $6 billion in the first quarter up sequentially on an increase in interest earning assets. Our total loan portfolio at quarter end was 184 billion roughly in line with the fourth quarter as an increase in other collateralized lending was partially offset by the sale of the remaining green Sky portfolio.

Denis P. Coleman: Our provision for credit losses was $318 million, which reflected net charge offs in our credit card lending portfolio.

Denis P. Coleman: Within our wholesale portfolio impairments trended modestly lower versus the levels in the last few quarters.

Denis P. Coleman: Turning to page 10, we continue to provide additional information detailing our CRE exposure as you know we moved early and actively risk managing our CRE exposure and currently have 26 billion in loans 4 billion. The AWS alternative equity and debt Securities and 2 billion of equity at risk related to C. I S.

Denis P. Coleman: Turning to expenses on page 11.

Denis P. Coleman: As you know, we moved early in actively risk managing our CRE exposure and currently have $26 billion in loans, $4 billion in AWM alternative equity and debt securities, and $2 billion in equity at risk related to CIEs. We go into expenses on page 11. Total quarterly operating expenses were $8.7 billion, resulting in an efficiency ratio of 60.9%. Our compensation ratio net of provisions was 33%, reflecting improved operating performance for the firm. Non-compensation expenses were $4.1 billion. These costs declined year on year, even inclusive of a $78 million FDIC special assessment charge, and were down sharply versus the fourth quarter.

Denis P. Coleman: Total quarterly operating expenses were $8 $7 billion, resulting in an efficiency ratio of 69%.

Our compensation ratio net of provisions was 33%, reflecting improved operating performance of the firm <unk>.

Denis P. Coleman: Non compensation expenses were $4 $1 billion. These cost declined year on year, even inclusive of the $7 million to $8 million FDIC special assessment charge and were down sharply versus the fourth quarter.

Denis P. Coleman: Our effective tax rate for the quarter was 21, 1% and for the full year, we expect the tax rate of approximately 22%.

Denis P. Coleman: Now onto slide 12, our common equity tier one ratio was 14, 7% at the end of the first quarter under the standardized approach in the quarter, we returned $2 $4 billion to shareholders, including common stock repurchases of one 5 billion and common stock dividends of 929 million.

Denis P. Coleman: We are currently running with 170 basis point buffer above our capital requirements given expectations for significant modifications to the Basel III proposed rule, we should have materially more flexibility on capital deployment.

Denis P. Coleman: Our effective tax rate for the quarter was 21.1%, and for the full year, we expect a tax rate of approximately 22%. Now on to slide 12, the common equity tier one ratio was 14.7% at the end of the first quarter under the standardized. In the quarter, we returned $2.4 billion to shareholders, including common stock repurchases of $1.5 billion and common stock dividends of $929 million. We are currently running with a 170 basis point buffer above our capital requirement. Given expectations for significant modifications to the Basel III proposed rule, we should have materially more flexibility on capital deployment.

Denis P. Coleman: We also remain committed to paying our shareholders, a sustainable and growing dividend.

Denis P. Coleman: In conclusion, our first quarter results reflect the strength of our leading global banking and markets franchise, and our growing asset and wealth management business.

Denis P. Coleman: Simply put we are delivering on the things we said we would do.

Denis P. Coleman: We're focused on our strategic objectives and the execution focus areas for 2024 that we laid out in January which will help our businesses produced mid teens returns through the cycle.

Denis P. Coleman: We are confident in our ability to deliver for shareholders, while continuing to support our clients.

Denis P. Coleman: Main optimistic about the future opportunity set for Goldman Sachs.

Speaker Change: With that well now open up the line for questions.

Denis P. Coleman: We also remain committed to paying our shareholders a sustainable and growing dividend. In conclusion, our first quarter results reflect the strength of our leading global banking and markets franchise and our growing asset and wealth management business. Simply put, we are delivering on the things we said we would do. We are focused on our strategic objectives and the execution focus areas for 2024 that we laid out in January, which will help our businesses 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 opportunities set for Goldman Sachs. With that, we'll now open up the line for questions. Thank you. Ladies and gentlemen, we will now take a moment to compile the Q&A roster.

Speaker Change: Thank you, ladies and gentlemen, we will now take a moment to compile the Q&A roster.

Speaker Change: Okay.

Speaker Change: Well go first to Glenn Schorr with Evercore.

Glenn Paul Schorr: Hi, Thanks very much.

Glenn Paul Schorr: Hum.

Glenn Paul Schorr: How fun could cause you are definitely executing on a lot of the objectives you laid out.

Glenn Paul Schorr: Of course, the sustainability of banking is what it is I noticed the lower pipeline, but the real question I have is the sustainability of the whole package, meaning you just had really strong revenue across the board.

Glenn Paul Schorr: On everything.

Glenn Paul Schorr: <unk> was up with that normally but non comp is down the provision down in our WMA didn't increase even though you were growing your financing so I'm, giving you a softball here and just say.

Glenn Paul Schorr: We'll go first to Glenn Schorr with Evercore.

Glenn Paul Schorr: All right, thanks very much. [inaudible]

What of that package that can continue to stick.

Glenn Paul Schorr: The sustainability is the whole package, meaning you just have really strong revenue across the board on everything. Comp is up with that normally, but non-comp is down, the provision is down, and RWA didn't increase even though you were growing your financing.

Glenn Paul Schorr:

Speaker Change: Well I appreciate I appreciate it Glen and I think there I think there are a bunch of things that continue to stack because one of the things you know that we've been focused on is building a more durable business and that there are a handful of things when you look across the whole package. We've made significant progress over the course of the last five years, certainly building our financing business.

Glenn Paul Schorr: So, I'm giving you a softball here and just saying...

Glenn Paul Schorr: What of that package can I do...

David Solomon: What of that package can continue to stick? Well, I appreciate it, Glenn, and I think there are a bunch of things that will continue to stick. Because one of the things you know that we've been focused on is building a more durable business, and that there are a handful of things where, when you look across the whole package, we've made significant progress over the course of the last five years. You know, certainly building our financing business in our markets business is something that's more durable and more sustainable. We still think there's lots of room to grow, and look, the world's growing.

Speaker Change: Our markets business is something that's more durable more sustainable we still think there's lots of room to grow and look the world's growing them with the world grow as our clients grow they need us to finance them.

Speaker Change: We've got the capital to deploy as long as we can drive attractive returns with that client base and so we stay focused on that we've doubled our management fee is our asset wealth management business over the last five years and we continue to be very focused on on fund raising our ability to deliver on that those are more durable revenues.

David Solomon: And when the world grows and our clients grow, they need us to finance them. We've got the capital to deploy as long as we can drive attractive returns with that client base. And so we stay focused on that. We've doubled our management fees on our asset management business over the last five years. And we continue to be very focused on fundraising and our ability to deliver on that. Those are more durable revenues. And there's operating leverage around that business that we still think we have yet to achieve. You've seen the margin improvement, obviously, in that business. But that business still has a higher capital density than we'd like that business to have, and we continue to focus on our historical principal investments and make progress there.

Speaker Change: And there is operating leverage around that business that we still think we have yet to achieve you've seen the margin improvement obviously in that business, but that business still has a higher capital density than we'd liked that business to have and we continue to focus on our historical principal investments and they can progress there.

Speaker Change: Overall, I think we've meaningfully improved the client franchise and taking wallet share and we're just very very focused on a relative participation in the market opportunity that exists with our big institutional clients and we've said over the course of the last few years and there's been lots of questions on it are.

Speaker Change: Are those wallet shares sticky I think the wallet share is our what I can't tell you for sure is what the opportunity set is on every quarter to quarter, but when you look at the breadth the leadership position in the global nature of these businesses and you will look at the whole package. These are durable businesses that produce accretive returns, we're very well positioned.

David Solomon: Overall, I think we've meaningfully improved the client franchise and taken wallet share. And we're just very, very focused on our relative participation in the market opportunity that exists with our big institutional clients. And we've said over the course of the last few years, and there have been lots of questions about it, you know, are those wallet shares, you know, sticky? I think the wallet shares are. What I can't tell you for sure is what the opportunity set is every quarter. But when you look at the breadth, the leadership position, the global nature of these businesses, and you look at the whole package, these are durable businesses that produce accretive returns.

Speaker Change: And we continue to focus on executing and enhancing that position.

Speaker Change: I definitely appreciate all of that can we talk.

Follow up on just the non comp piece and talk with you.

Speaker Change: He has some big drops in amortization and depreciation and some marketing and stuff. So are those that actually run rate level now going forward also because that was a nice.

David Solomon: Thank you, everyone. Thank you. Thank you.

Glenn Paul Schorr: Can we just follow up on just the non-con piece?

Speaker Change: A positive surprise.

Denis P. Coleman: Morning, Glenn. It's Dennis.

Speaker Change: Good morning, Glenn It's Dennis you know as we've said over the last number of quarters, we've been very very focused on non comp and containing the growth of mountaintop. There clearly are inflationary pressures that impacted a number of items in our non comp expense.

Denis P. Coleman: You know, as we said, over the last number of quarters, we've been very, very focused on non-compensation and, you know, containing the growth of non-compensation. There clearly are inflationary pressures that impact a number of items in our non-compensation expense. You know, the sharp decrease sequentially, we're pleased with as well as the year over year decrease. But there were a number of items over the course of last year that we didn't necessarily expect to repeat. And so it's good to get on to a more normalized trading trajectory with respect to our non-comp expense base, but it's something we're going to remain very, very focused on managing in a disciplined fashion. But I think this quarter is a much more normal quarter than some of the preceding quarters.

The sharp decrease sequentially, we're pleased with as well as the year over year decrease, but there were a number of items over the course of last year that we didn't necessarily expect to repeat and so it's good to get on to a more normalized operating trajectory with respect to our non comp expense base, but it's something we're going to remain very very focused on managing in a disciplined.

Speaker Change: Fashion, but I think this quarter is a much more normal quarter and then some of the preceding quarters.

Ebrahim Huseini Poonawala: Thank you. We'll go next to Ebrahim Poonawala with Bank of America.

Speaker Change: Thank you we'll go next to Ebrahim <unk> with Bank of America.

Ebrahim Huseini Poonawala: Good morning. I guess I just want to follow up, David. You mentioned AI and I would love it if you could double-click on some of the comments you made around, Comparing what's going on with AI today versus maybe the dot-com bubble around the runway, this might create for capital markets IB, not just for this year, but beyond. And then also the other side around. Is there a line of sight of how much more efficient Goldman itself can get by deploying AI?

Ebrahim: Good morning.

Ebrahim: I just wanted to follow up David you mentioned, Yeah, Hi, and.

Ebrahim: I would love that still it's hard enough seats to figure out what type what steel.

Ebrahim: If you can double click on some of the comments you made around.

Ebrahim: Comparing what's going on with AI today versus maybe the dotcom bubble around the runway this might create for capital markets IBD not just this year, but beyond and then also the other side around.

Ebrahim: Is there a line of sight of how much more efficient Goldman at cells can get by deploying AI. Thank you.

David Solomon: Thank you.

David Solomon: Sure. So I mean, the big, big picture. And look, I'm not a stock picker.

Speaker Change: Sure So I mean.

Speaker Change: Big Big picture and look I'm, not a stock picker, so I'm not going to comment when you when you make a comparison to.

David Solomon: So I'm not going to comment, you know, when you make a comparison to, you know, to, you know, the internet explosion in 1999, 2000, 2001, you know, I'm not going to comment on that. But I think we have, we've got a lot of stock market capitalization that's being driven by big platforms that I think have an enormous competitive advantage around the scaling of these, these technologies. But broadly speaking, these technologies require certain things, including infrastructure and power, and these things require financing to drive the scale that's going to be necessary for people to make the investments that they see as important to keep their businesses competitive at pace. And that is creating an ecosystem of activity in our investment banking and markets business that, you know, we've seen in the context of other areas of significant shift or macro expansion over a long period of time. So I actually think there's a very, very constructive runway of opportunity set for us with our clients as people reposition their businesses. And, you know, we're talking about a level of scale that is, you know, that is candidly unprecedented.

Speaker Change: Two.

Speaker Change: Now to the U.

Speaker Change: The Internet explosion in 1999, 2000, 2001, yeah, I'm not going to comment around that I think we have.

Speaker Change: Got a lot of stock market capitalization, that's being driven by big platform. So I think I have an enormous competitive advantage around the scaling of these these technologies.

Speaker Change: But broadly speaking these technologies require certain things including infrastructure.

Speaker Change: Power.

These things require financing to drive the scale, that's going to be necessary for people to execute on the investments that they see as important to keep their businesses competitive at pace and that is creating an ecosystem of activity in our investment banking and markets business.

Speaker Change: We've seen in the context of other areas of significant shifts or macro expansion over a long period of time. So I actually think there's a very very constructive runway of opportunity set for us with our clients as people reposition their businesses and we're talking about a level of scale.

Speaker Change: That is that is candidly.

Speaker Change: That is candidly unprecedented and so I think that opportunity is something over the course. This is not a quarter to quarter thing. This is over the next five to 10 years.

David Solomon: And so I think that opportunity is something, you know, over the course, this is not a quarter to quarter thing; this is over the next five to 10 years. And we're very, very focused on it and very engaged. And by the way, it's not just companies, it's governments, obviously, that are making enormous investments in bringing infrastructure into their locales.

Speaker Change: We're very very focused on it and very engaged and by the way it's not just companies governments, obviously, they're making enormous investments.

Speaker Change: And bringing infrastructure into their locale.

Speaker Change: And so all of this is something that we're very strategically focused on.

Speaker Change: Double clicking into getting more narrowly focused on Goldman Sachs.

David Solomon: And so all of this is something that we're very strategically focused on Double clicking and getting more narrowly focused on Goldman Sachs. You know, I would just say we see enormous opportunities for productivity gains and also opportunities for efficiency. You know, our use cases that we're testing and that we're implementing focus on those two areas. But I'd really like the focus to be more on productivity and the ability to scale our smartest people to do more with our clients, rather than expecting an efficiency gain that becomes very cost-accretive. I think one of the most important things for this firm and the success of this firm is the time our people spend with clients, serving our clients, and executing for our clients, and these tools give us more productivity.

Speaker Change: I would just say, we see enormous opportunities for productivity gains and also opportunities for efficiency.

Speaker Change: Our use cases.

Speaker Change: That we're testing and that we're implementing focus on those two areas, but I'd really like to focus to be more on productivity and the ability to scale, our smartest people to do more with our clients rather than expecting an efficiency gain that becomes very past accretive.

Speaker Change: I think one of the most important things for this firm and the success of this firm is the time people spend with clients, serving our clients executing for our clients and these tools give us more productivity and also when we look at our data sets and what we have internally and ability to deliver them a value added package of information thought.

Speaker Change: Process that we think can be differentiated and so we're very focused on the productivity side. Although of course, we have analog systems and processes, where there will be efficiency and we're also focused on bringing those to bear when we look at our overall cost structure.

David Solomon: And also, when we look at our data sets and what we have internally, an ability to deliver them, a value-added package of information and thought processes that we think can be differentiated. And so we're very focused on the productivity side. Although, of course, we have analog systems and processes where there will be efficiency, and we're also focused on bringing those to bear when we look at our overall cost structure.

Speaker Change: That's good color. Thank you and just separately for the Goldman Star Craig I think from an investor standpoint, a lot of focus on.

Speaker Change: How quickly that can grow the share of asset management, you've talked about the H b ice coming down all the assets going up is how else should.

Ebrahim Huseini Poonawala: That's good, Kallal. Thank you.

Ebrahim Huseini Poonawala: And just separately, for the Goldman stock, right, I think from an investor standpoint, a lot of focus on how quickly we can grow the share of asset management. You've talked about the HPIs coming down, and alternative assets going up. How else should shareholders and prospective investors think about the strategy around growing asset management revenues? And is inorganic growth at all part of the strategy in terms of how management is thinking about things today?

Speaker Change: Sure sure shareholders and prospective investors think about strategy around growing the asset management revenues in a way.

Speaker Change: It is inorganic growth at all part of the strategy.

Speaker Change: I'm thinking about things okay. Thank you.

Speaker Change: So we in January we said to you we thought high single digit growth.

Speaker Change: With margin improvement and less capital density over time, we're executing on that.

Speaker Change: Yeah, we are very focused at the moment on our organic execution.

Speaker Change: For them, obviously generates a lot of capital there could be a time in the future where something might come up that could be interesting and could accelerate that.

David Solomon: Thank you.

David Solomon: So we said to you in January that we thought high single-digit growth with margin improvement and less capital density over time. We're executing on that. You know, we are very focused at the moment on our organic execution. The firm obviously generates a lot of capital. There could be a time in the future where something might come up that could be interesting and could accelerate, you know, that pace and the overall mix.

That pace in the overall mix, but at the moment our focus is on the execution of what we have in front of us.

Speaker Change: And we are making good progress, but I think we've put out a handful of metrics. Both in terms of top line growth our ability to continue to fund raise you saw that we highlighted $15 billion of fundraising and alternatives in the first quarter. We said, we expect to raise $40 billion to $50 billion. This quarter. Obviously this year, obviously, the the 15 billion keeps us on pace.

Speaker Change: The $40 billion to $50 billion, we said we could raise this year that doesn't stop this year. We think we have a very strong fundraising machine that can continue for a number of years going forward.

David Solomon: But at the moment, our focus is on the execution of what we have in front of us, and we are making good progress. But I think we've put out a handful of metrics, both in terms of top-line growth and our ability to continue to fundraise. You saw that we highlighted $15 billion of fundraising and alternatives in the first quarter. You know, we said we expected to raise $40 to $50 billion this year. Obviously, the $15 billion keeps us on pace for the $40 to $50 billion we said we could raise this year. That doesn't stop this year.

Speaker Change: So we're focused on the things that matter in asset management, what matters performance matters client experience matters, we're incredibly focused on both of those things and working hard to make sure we use our global scale.

Speaker Change: And the depth that we have around the world to execute very very effectively.

Speaker Change: Thank you we'll go next to Christian Ballou with Autonomous research.

Christian Ballou: Good morning, guys.

Christian Ballou: Maybe I'll ask Glenn's question in a different way if I look at that 80% are we for the global banking markets business. It really it really touches my eye here. So how would you characterize this quarter's performance is it like sort of normal ish to you does it feel maybe.

David Solomon: You know, we think we have a very strong fundraising machine that can continue for a number of years going forward. So we're focused on the things that matter in asset management. What matters? Performance matters. Client experience matters. We're incredibly focused on both those things. And, you know, working hard to make sure we use our global scale and the depth that we have, you know, around the world to execute very effectively.

Christian Ballou: <unk> to you.

Christian Ballou: Just trying to figure out if it's 18% or are we anywhere near sustainable for that business.

Christian Ballou: So it was a it was a it was there is there is there's no way to to to to shave. This it was a strong quarter for global banking and markets.

Chinedu Bolu: Thank you. We'll go next to Christian Bolu with Autonomous Research.

Chinedu Bolu: Good morning, guys. Maybe I'll ask Glenn's question in a different way.

Peak I mean, I can point in the last few years supporters in global banking and markets, where the returns were higher.

David Solomon: If I look at that 18% ROE for the global banking and markets business, it really catches my eye here. So how would you characterize this quarter's performance? Is it like sort of normal-ish to you? Does it feel maybe peak-ish to you? Again, just trying to figure out if 18% ROE is anywhere near sustainable for that business.

Christian Ballou: But I certainly wouldn't say that this is what we expect to be an average quarter in global banking and markets. We've said clearly we think this is a mid teens business through the cycle. The performance this quarter was higher than we.

Christian Ballou: Our performance last year was meaningfully lower I think the right thing to focus on Christian is mid teens through the cycle and that's the way we think about it and you know there was client activity and opportunity set for us this quarter and I think one of the things that that we continue to try to talk about is that when there is opportunity with our clients. There is opportunity in the market. We're good.

David Solomon: There's no way to shade this. It was a strong quarter for global banking and markets. Peter T. Lee, Daniel Fannon, Glenn Schorr, Robert Smalley, Gerard Cassidy, Charles Scharf, and I think one of the things that we continue to try to talk about is that when there is opportunity with our clients, there is opportunity in the market. We're good at capturing that, and delivering it for shareholders. And then when the environment's more tough, though, this is a more durable and sustainable business than people may have looked at in the past. But I would view this as a very strong quarter in global banking and markets and not what we would target as the average run rate for the business.

Christian Ballou: Actually that delivering that for shareholders and then when the environment is more tough, though this is a more durable and sustainable business.

Christian Ballou: Then that people may have looked at it in the past, but I would view this as a very strong quarter in global banking markets and not what we would we would target as the average run rate for the business.

David Solomon: Okay, that's very helpful. Maybe on to private wealth. If I'm reading slide nine correctly, you had, you know, something like 17 billion inflows into wealth management in the US. So that would equate to something like 9% organic growth, which is, you know, well above peers; I would call it best in class. So can you give more color on what's driving that growth? Maybe any color by regions or products as to what's responding with clients? And again, longer term, how are you thinking about sustainability at that level? Of, of organic growth?

That's very helpful.

Christian Ballou: Maybe on private wealth, if I'm reading slide nine correctly, Hugh you had something like 17 billion of inflows into wealth management U S. So that would equate to something like 9% organic growth, which is well above peers I would call. It best in class. So can you give more color on what's driving that growth.

Christian Ballou: Maybe any color by region, the paradox as to what's resonating with clients.

Christian Ballou: Then longer term, how you're thinking about.

Christian Ballou: The ability of that that level of organic growth.

David Solomon: Yeah, you know, again, this, I think, comes down to focus. And, you know, we made some very, we talked about conscious decisions.

Speaker Change: Yeah again this I think it comes down to focus and you know we made some very you talk about conscious decision.

David Solomon: You know, we have talked about, you know, broadening our wealth platform to get, you know, much more broadly into, you know, what I call, kind of, high net worth, high net worth wealth management. And with the sale of United Capital, we continue to be very focused on our ultra high net worth platform. It is an extraordinary platform. I do think it's the best in class platform.

Speaker Change: <unk> talked about broadening our wealth platform to get much more broadly into what I'd call kind of high net worth high net worth wealth management and with the sale of the United Capital. You know, we continue to be very focused on our ultra high net worth platform.

Speaker Change: It is an extraordinary platform I do think it's the best in class platform I do think that the ultra high net worth business is still a very fragmented business. While we have leading share I think those shares are still on a global basis.

David Solomon: I do think that the ultra high net worth business is still a very fragmented business. While we have leading shares, I think those shares are still on a global basis. You know, a leader is a single digit share.

Speaker Change: Leader is a single digit share theres a lot of wealth in the world, There's a lot of wealth accumulating.

David Solomon: There's a lot of wealth in the world, and there's a lot of wealth accumulating. We are very, very, you know, well positioned to continue to capture that secular trend. And I think the business is performing, you know, is performing very, very well. You know, our alternative investment franchise is differentiated, and we're allowed to deliver alternative investments in an effective way to wealth clients. I think that's something that gives us a strong secular tailwind.

Speaker Change: We are very very well positioned to continue to capture that secular trend I think the business is performing.

Speaker Change: Forming very very well.

Speaker Change: Are all franchise I think is differentiated and we're allowed to deliver all in an effective way to wealth clients. I think that's something that gives us a strong secular tailwind we're expanding our private banking activity. That's not something that we had been focused on which I think is also strengthening our position as a wealth manager. So I think there's a good runway for this.

Speaker Change: Business I do think it is a best in class franchise.

Speaker Change: That has room to grow and I think you've seen it perform well and we're very focused on it I think the you know the.

Chinedu Bolu: [inaudible]

Chinedu Bolu: Great, thank you.

Betsy Lynn Graseck: We'll go next to Betsy Graseck with Morgan Stanley. Hi, good morning. Can you hear me okay?

Speaker Change: The sharp decision around how we're going to focus this business I think we're benefiting from at the moment.

Speaker Change: Great. Thank you.

Speaker Change: We'll go next to Betsy <unk> with Morgan Stanley.

Betsy Lynn Graseck: Okay. All right, great. Just want to make sure.

Betsy: Hi, good morning.

Betsy Lynn Graseck: All right, thanks. So just two follow-ups. One, I heard all the commentary about how the 1Q run rate was a little bit better than run rate on average over time, but it doesn't take away from the fact that 1Q was very strong. I just wanted to understand, was there anything that we should understand about revenues in equities and fixed income, for example, that were different this quarter? asset class you're looking at. So, was there anything unique about that opportunity set that enabled you to do this in a way that didn't really tag VAR at all?

Betsy: Can you hear me okay. Okay, all right great I, just want to make sure.

Betsy: Alright. Thanks, So just two follow ups, one I heard all the commentary about how the <unk>.

Betsy: Run rate, a little bit better than the run rate on average over time, but it doesn't take away from the fact that <unk> was very strong I just wanted to understand was there anything that we should understand about the you know.

Betsy: Revenues in equities and fixed income for example that were different this quarter.

And and the reason I ask is you know var efficiency was so strong right you've delivered very strong trading revenues on far that was basically flat Q on Q I mean, a little down a little off depending on which asset you know which which.

Betsy: Asset class you're looking at so was there anything in the and when you mentioned your you stepped in to client activity.

Betsy: And opportunity set was there anything unique about that opportunity set that enables you to do this in a way that didn't really tag bar at all.

Denis P. Coleman: Sure. So, Betsy, it's Dennis.

Betsy: Sure. So that's just Dennis nice to nice to hear from you.

Denis P. Coleman: It's nice to hear from you. Thanks. Look, to give you some color on that, I wouldn't point to any particular discrete item. I would say revenue generation and activity were broad-based. But in addition to the consequence of the focus on market share and wallet share that we've made across the client franchise over time, we also did see good opportunities to risk intermediate on behalf of clients across geographies and across asset classes. And I would observe that, you know, over the course of the quarter, it was just a very benign operating environment.

Speaker Change: Look to give you some some color on that I wouldn't point to any particular discrete item I would say the the revenue generation of the activity was broad based but in addition to the consequence of the focus on market share and wallet share that we've made across the client franchise.

Speaker Change: Over time, we also did see good opportunities to risk intermediate on behalf of clients across geographies across asset classes and I would observe that over the course of the quarter.

Speaker Change: It was just a very benign operating environment credit spreads were tightening equity valuations were going up and that provides a tailwind to our performance across portions of our global banking and markets business as well. The first quarter was obviously often seasonally strong as well. So we think we really we really captured a lot of the opportunity that was presented by both the <unk>.

Denis P. Coleman: Credit spreads were tightening, and equity valuations were going up. And that provides a tailwind to our performance across portions of our global banking and markets business as well. The first quarter is obviously often seasonally strong as well. So, we think we really captured a lot of the opportunity that was presented by both the environment and our client engagement. And as David said, that may not necessarily be the case, you know, each and every quarter, particularly in FICs and equities. So, when we talk about the global banking and market segment overall, clearly, there is more upside across, you know, banking, but a strong performance across both FIC and equities in Q1.

Speaker Change: <unk> and our client engagement.

Speaker Change: And as David said that that may not necessarily be the case, you know each and every quarter, particularly in FIC and equities. So.

Speaker Change: When we talk about like our global banking and markets segment overall, clearly more upside across.

Speaker Change: Banking, but a strong performance across both FIC and equities in Q1.

Betsy Lynn Graseck: Super, that's really helpful. Thanks for the incremental color there.

Speaker Change: Super that's really helpful. Thanks for the incremental color. There just one other follow up David you mentioned, you're able to deliver all in a unique way to the wealth platform that you've got could you just give us a little more color as to what youre thinking about there that we shouldn't I understand thanks, so much.

David Solomon: Just one other follow-up. David, you mentioned you're able to deliver alternative assets in a unique way to the wealth platform that you've got. Could you just give us a little more color as to what you're thinking about there so that we understand? Thanks so much.

David Solomon: Sure, I think one of the things that our wealth management franchise finds very attractive is that we want an open platform. And so when it comes to Alt, we obviously have a very, very broad, very, very deep, very, very unique offering as one of the top five or six Alt providers on an integrated basis in the world with our own product, what we're manufacturing out of our asset management business. But in addition, we want an open platform where we deliver access to alternative solutions and products from all different world-class managers around the world across the spectrum. And so I think that's a very, very unique offering that very, very affluent people who manage their wealth at Goldman Sachs find super attractive and super differentiated.

Speaker Change: Sure I think one of the things one of the things that our wealth management franchise finds very attractive as we run an open platform and so when when it comes to all we obviously have a very very broad very very deep very very unique offering as one of the top five or six all providers on an integrated basis in the world with our own products where man.

Speaker Change: Factoring out of our asset management business, but in addition, we want an open platform, where we deliver them access to.

Speaker Change: Alternative solutions and products from all different world class managers around the world across the spectrum and so I think that's a very very unique offering that very very affluent people, who wealth manager Goldman Sachs five super attractive and Super defined yet.

Brennan Hawken: Thank you. We'll go next to Brennan Hawken with UBS.

Speaker Change: Thank you we'll go next to Brennan Hawken with UBS.

Brennan Hawken: Good morning, thanks for taking my question. So, I wanted to ask one on your M&A franchise. So, the recovery and announced M&A have been really impressive, but really kind of dominated by strategics. And given your strong franchise among sponsors, I'm curious to get an update about what you're seeing among that cohort, and maybe when you might expect we will see a ramp in announcements from the sponsor side.

Brennan Hawken: Good morning, Thanks for taking my question. So wanted to ask one on your.

Brennan Hawken: Your M&A franchise. So the recovery in announced M&A has been really impressive, but really kind of dominated by strategics and given your strong franchise amongst sponsors I'm curious to get an update about what you're seeing among that cohort and maybe when you might expect we will see a ramp in announcements from the sponsor side.

David Solomon: Yeah, Brennan, I appreciate that question. And that's a that's a sharp observation on your part.

Speaker Change: Yeah Brennan, that's appreciate that question and that's a that's a that's a sharp observation on your part.

David Solomon: The sponsor activity is still muted, but I would say it's definitely picking up the engagement with sponsors, and the quarter was meaningfully improved. And as I've said before, you know, sponsors make money both for themselves and for their investors by buying things and selling things. And when you look at the LP community, the LP community is putting a lot of pressure on the financial sponsor community to return more capital and increase the velocity of capital return. And so I do think the pace is going to pick up in the coming quarters. I'd say the activity, interaction, and engagement is higher in the first quarter than it was throughout 2023.

The sponsor activity is still muted, but I would say, it's definitely picking up the engagement with sponsors in the quarter was meaningfully improved and as I've said before sponsors sponsors make money.

Speaker Change: Both for themselves and for their investors by buying things and selling things and the level of activity has been incredibly muted and when you look at the L. P community. The LP community is putting a lot of pressure on the.

Speaker Change: The financial sponsor community to return more capital and increase the velocity of capital return and so I do think the pace is going to pick up in the coming quarters, I'd say the activity and interaction and engagement is higher in the first quarter than it was throughout 2023.

David Solomon: But I would say it's still operating at lower levels, and there's a lot of upside for our business. Our business is very correlated to a pickup in activity and sponsor activity. And so to the degree that it did pick up, that would be a very big tailwind for our business across banking and markets broadly. When I look at our leveraged finance deals book, it's still operating at historically very, very low levels. We feel fortunate that we've got a good amount of capital flexibility that we can accelerate to deploy, which is obviously a very creative, innovative, and attractive business. We're not seeing it really accelerate yet, but I think it's coming. And certainly, the level we've had over the course of the last 12 to 18 months is not sustainable. It will pick up. It's just a question of when. And so that is a potential tailwind for our business in future quarters.

Speaker Change: But I would say, it's still operating at lower levels and there's a lot of upside for our business our business very correlated to a pickup in sponsor activity and so to the degree that it did pick up that would be a very big tailwind for our business across banking and markets broadly when I look at our.

Speaker Change: Leveraged finance deals book, it's still operating at historically very very low levels. We feel fortunate that we've got a good amount of capital flexibility that was still accelerate to deploy which is obviously very accretive.

Speaker Change: Accretive and attractive business, we're not seeing it really accelerate yet, but I think it's coming in.

Speaker Change: And certainly the sustained level, we've had over the the level. We've had over the course of the last 12 to 18 months is not sustainable it will pick up it's just a question of when and so that is that as a potential tailwind for our business in future quarters.

Brennan Hawken: Thanks for that color, David. I appreciate it.

Speaker Change: Great. Thanks, Thanks for that color David I appreciate it.

Denis P. Coleman: And then another question on alternative investments. So fundraising looks really good. I know there can be some noise in the revenue. So just curious about the alternative revenue down year over year, and the AUS, you know, only up sort of marginally, sequentially. Could you give some color around what was happening in those lines and maybe any potential noise?

Speaker Change: And then another.

Speaker Change: Question on on all its so fundraising looks really good.

Speaker Change: I know there can be some noise in the revenue. So just curious about the <unk> revenue down year over year and the <unk>.

S only up sort of marginally sequentially could you give some color around what was happening in those lines and maybe any potential noise.

Denis P. Coleman: Sure, Dennis. So a couple things. Obviously, the the movement in a US is a function of how we fundraise how we deploy and overall levels, we have had a lot of success fundraising, not just in the last quarter, at 14 billion, but now with, you know, the whole 265 plus billion since the original investor day, but there is a lag in terms of when some of that capital is put to use and actually moves into a US, not all of our funds that are raised are a US and immediately so I think that is something you can look out for in future periods. And then in terms of some of the sequentials on alts, as you know, as David was walking through, you know, our platform, our wealth platform in terms of having Goldman Sachs, proprietary funds, also open architecture, third party platform, some of the alts fees we generate in raising capital for other managers on our platform. And we looked over the sequential period, we had less by way of placement fees associated with those capital raises in the first quarter than we did in in the fourth quarter. Last year.

Speaker Change: Sure Brett.

And as Dennis So a couple of things obviously the movement in a U S.

Denis P. Coleman: A function of how we fund raise how we deploy and overall.

Speaker Change: <unk>, we have had a lot of success fundraising not just in the last quarter at 14 billion, but now with the whole 265 plus billion since the original Investor day, but there is a lag in terms of when some of that capital is put to use and actually moves into a U S. A not all of our funds that are raised our <unk> immediately so I think that is something you can.

Speaker Change: Look out for in future periods, and then in terms of some of the sequential on alts. It's.

Speaker Change: David was walking through our platform our wealth platform in terms of having Goldman Sachs proprietary funds also open architecture, a third party platform some of the old fees, we generate and raising capital for other managers on our platform and we looked over the sequential period, we had less by way of placement fees associated with those capital raise.

Speaker Change: As in the first quarter than we did in in the fourth quarter of last year.

Michael Lawrence Mayo: Thank you. We'll go next to Mike Mayo with Wells Fargo. Hi.

Speaker Change: Thank you we'll go next to Mike Mayo with Wells Fargo.

Speaker Change: Yeah.

Speaker Change: Hi.

David Solomon: David, you reiterated the desire for Goldman to have a more narrow strategic focus, but you still have some cleanup from the past. Charges this quarter for GreenSky, the GM card, Platform Solutions still lost $117 million. So I'm just trying to figure out in this context where transaction banking stands. I mean, you had 8% year-over-year growth, so that's decent, but three years ago, March 1st, you guys said transaction banking: you were building global payments around the world. And then, on March 8th of this year, on Bloomberg, it says that you're closing Japan, and now you're focusing on the US and Europe. So on the one hand, are you simply pulling back your ambitions? On the other hand, maybe you have more financial discipline, and you're making sure these adjacent activities are generating profits instead of just growth.

Michael Lawrence Mayo: David you've reiterated.

Michael Lawrence Mayo: You've reiterated the desire for government to have a more narrow strategic focus.

Michael Lawrence Mayo: You'll have some cleanup from the past charges this quarter for Green Sky. The G. M card platform solutions to a loss of $117 million. So I'm just trying to figure out.

Michael Lawrence Mayo: In this context, where transaction banking because I mean, you had 8% year over year growth. So that's decent right.

Michael Lawrence Mayo: Three years ago March 1st you, guys said transaction banking or building global payments around the World and then March eight of this year on Bloomberg. It says that your clothing, Japan and now you're focusing on the U S and Europe. So on the one hand.

Michael Lawrence Mayo: You simply pulling back your ambitions on the other hand, maybe you have more financial discipline, and you're making sure of these.

Michael Lawrence Mayo: Adjacent activities are generating profits instead of just growth.

Michael Lawrence Mayo: You know, look, Mike, I think you summarized it. I think you summarized it well. I think it's yes to a bunch of the things that you said.

Speaker Change: Look Mike I think you I think you summarized that I think you summarized it well I think it's yes to a bunch of the things that you said.

David Solomon: You know, we're looking hard. We are. I think it's very important for me to say that we're very committed to transaction banking. We think we've got very, very good technology and a good platform that we can grow and continue to scale over time. But there's no question; we're very focused on making sure that we execute appropriately, and that it's not just top-line growth but profitability. It's something that sits in our client franchise and adds to the portfolio of things that we can bring to our clients.

Michael Lawrence Mayo: Yeah, we're looking hard at <unk>. We are I think it's very important for me to say that we're very committed to transaction banking.

Michael Lawrence Mayo: We think we've got very very good technology and a good platform that we can grow and continue to scale over time.

Michael Lawrence Mayo: But there's no question, we're very focused on making sure that we execute appropriately.

Michael Lawrence Mayo: And that it's not just topline growth that it.

Michael Lawrence Mayo: It delivers profitability is something that fits in our client franchise and adds to the portfolio of things that we can bring to our clients I think some of the ambitions might've been too broad in terms of our ability to execute.

David Solomon: I think some of the ambitions might have been too broad in terms of our ability to execute immediately. And so we've narrowed that, but we remain committed, focused, and growing. And I think this is, you know, a medium and longer-term project that we will deliver on. It's small, but I think we've got the right focus. You know, we made a hire to bolster expertise and leadership, and we're moving forward on that strategy. And, you know, with respect to, you know, the cleanup, we continue to narrow and clean up. The, you know, the after tax loss from the platforms is less than $100 million. We've said clearly that we believe that we can bring the platforms to break even or profitability in 2025, and we're executing on that.

Michael Lawrence Mayo: Immediately and so we've narrowed that but we remain committed focused and growing.

Michael Lawrence Mayo: I think this is a you know a medium and longer term project that we will deliver on its small.

Michael Lawrence Mayo: But I think we've got the right focus we made a hire to bolster the expertise and the leadership.

Michael Lawrence Mayo: And we're moving forward on that strategy and you know with respect to the cleanup, we continue to narrow and clean up.

Michael Lawrence Mayo: The after tax loss from the platforms and it was less than $100 million.

Michael Lawrence Mayo: Said clearly that we believe that we can bring the platforms to breakeven or profitability in 2025, and we're executing against that.

Michael Lawrence Mayo: Just to follow up on transaction banking, you said some ambitions were too broad. Again, it's better to have, you know, profitable growth than just growth. So, point acknowledged. But what happened? I mean, where were you kind of underestimating expenses or the build-out costs, or what was more difficult than you had anticipated?

Just a follow up on the transaction banking you said some ambition for two broad again, it's better to have it.

Michael Lawrence Mayo: Profitable growth than just growth so.

Speaker Change: Acknowledged but what happened I mean, wherever you kind of underestimate any expenses or the.

Speaker Change: The build out costs or what was more difficult than you had anticipated.

Speaker Change: Well I think I think there are I think there were I think there were a number of things.

David Solomon: I think there were a number of things, Mike, that came together. I think when you're building new businesses, you give authority to the people that are building those businesses, and you create metrics, and you hold people accountable as you advance, with which we look at the expansion of these kinds of activities. And so that's something else that went into the mix.

Speaker Change: Mike that that John that came together I think I think when you're when you're building when you're building new businesses.

Speaker Change: You know you give priority to the people that are building those businesses and you create metric you hold people accountable as you advance.

Speaker Change: And I think there were things, where we thought we could do more globally and candidly when we really looked at the cost of executing and delivering there was more friction in that context. So we've chosen to narrow some of that in terms of the global footprint of that.

David Solomon: And so look, I think one of the things that we try to do is to look at everything with facts, with data, with information to be unemotional and to be willing to say, OK, this isn't exactly right, so we're going to adjust. And I think we're showing that we're willing to adjust and make adjustments, always with a goal of growing the firm and delivering for shareholders, driving profitable businesses that deliver accretive returns for shareholders. We'll get some things right. We're going to get some things wrong. But when we look at the information, the data, and it's not exactly perfect, we'll adjust.

Speaker Change: That doesn't mean later there might not be opportunity to do it but we think for now thats. The right action I'd say secondarily, the regulatory environment changed massively.

Speaker Change: And as also raise the bar and created a headwind and a different lens with with which we look at the expansion of these types of activities and so that's something else that went into the next and so look I think one of the things that that.

Speaker Change: We try to do.

Speaker Change: Is to look at everything with facts with data with information to be unemotional and to be willing to say, okay. This isn't exactly right. So we're going to adjust.

Speaker Change: And I think we're showing that we're willing to adjust and make adjustments always with the goal of growing the firm and delivering for shareholders driving profitable businesses that deliver accretive returns for shareholders, we'll get some things right. We get something is wrong, but when we look at the information the data and it's not exactly perfect well adjust.

Steven Joseph Chubak: Thank you. We'll go next to Steven Chubak with Wolf Research. Hey, good morning.

Thank you we'll go next to Steven Shabak with Wolfe Research.

Steven Joseph Chubak: Hey, good morning.

David Solomon: So I wanted to follow up, David, on the earlier discussion just on sponsor-related activity. Private credit fundraising remains robust, but the syndicated markets are also reopening. Just wanted to better understand what you're seeing in terms of competition in syndicated versus private markets and how it's impacting your IB and all franchises. And, given some of the recent price coverage, maybe just speak to your growth ambitions in the private credit space more

Steven Joseph Chubak: So wanted to follow up on.

Steven Joseph Chubak: Hi, Good morning, guys I wanted to follow up David with the earlier discussion.

Steven Joseph Chubak: On sponsor related activity no private credit fund raising remains robust, but the syndicated markets are also reopening.

Steven Joseph Chubak: Just wanted to better understand what youre seeing in terms of competition and syndicated versus private markets. How it's impacting your IV in all franchises and just given some of the recent price coverage, maybe just speak to your growth ambitions in the private credit space more broadly.

David Solomon: Sure. You know, I'm gonna make a couple of comments, but I'm gonna ask Denis to comment too, because, as you know, you know, Denis ran these businesses for us for an extended period of time. But I, I, you know, I just want to say first, the narrative that, in some way, shape or form, this is about the syndicated market versus the private market is, I think, is an oversimplification. As transaction volumes increase, particularly in the sponsor community, the amount of activity that will come out of the syndicated market will obviously increase meaningfully, and we're very well positioned for that. We are one of the largest players in that, and that area is operating at, you know, at cyclical lows, you know, at the moment.

Steven Joseph Chubak: Sure.

Speaker Change: You know what I'm going to make a couple of comments, but I'll ask Dennis to comment too because as you know Dennis Dennis ran these businesses.

You know for us or for an extended period of time, but I'd just say firstly the net.

Denis P. Coleman: Is that in some way shape or form.

Denis P. Coleman: This is this is about the the syndicated market versus the private market.

Denis P. Coleman: I think it's an oversimplification.

Denis P. Coleman: As transaction volumes increase, particularly in the sponsor community the amount of activity that will come out of the syndicated market will obviously increase meaningfully we're very well positioned for that.

Denis P. Coleman: We are one of the largest players in that.

Denis P. Coleman: That area is operating it.

Denis P. Coleman: It's cyclical lows at the moment.

David Solomon: But that's going to continue to be a very, very important part of capital formation, and it's not going away. You know, the growth in private credit, you know, will continue.

Denis P. Coleman: But that's going to continue to be very very important part of capital formation, and it's not going away.

Denis P. Coleman: The growth in private credit will continue.

David Solomon: I think we're very well positioned for that. We have about $130 billion of private credit assets, which makes us one of the largest players. I've said publicly that we have aspirations to continue to invest and grow, and we see a number of places where we can do that. We're very focused on that. I do think it's important to highlight that we haven't been through a credit cycle in a very long time, and so while there are lots of private credit players that continue to grow and expand, you know, how those platforms and those businesses will respond when we do go through a credit cycle, and we will go through a credit cycle, is a little bit, you know, unclear at the moment.

Denis P. Coleman: I think we're very well positioned for that we have about $130 billion of private credit assets, which makes us one of the largest players.

Denis P. Coleman: Said publicly we have aspirations to continue to invest and grow and we see a number of places. We can do that we're very focused on that I do think it's important to highlight that we've not been through a credit cycle and a very long time and so while there are lots of private credit players that continue to grow and expand.

Denis P. Coleman: How those platforms and those businesses will respond when we do go through a credit cycle and we will go through a credit cycle is a little bit unclear at the moment, but I think strategically we're in a very very interesting position because we have the ability to Barry for our clients both our capabilities in the syndicated market and also our private credit capability.

David Solomon: But I think strategically, we're in a very, very interesting position because we have the ability to combine for our clients both our capabilities in the syndicated market and also our private credit capabilities. And you can see that. I mean, I can point to a transaction that was done in the last few months where we did just that. And, in fact, it wasn't just in credit; it was in equity, too. You can look at the Endeavor transaction, and you can see our ability to participate and lead both as a syndicated lender but also as a capital provider across the capital structure for our investors, as an example of the way that I think our franchise and our platform is differentiated. Dennis, do you want to add anything to those comments? Sure. I think it's great.

Denis P. Coleman: And you can see that I mean, I can point to a transaction that was done in.

Denis P. Coleman: In the last in the last few months, where we did just that and in fact it wasn't just in credit. It was an equity too you can look at the endeavor transaction and you can look at our ability to participate and lead both as a syndicated lender, but also as a capital provider across the capital structure for our investors as an example.

Denis P. Coleman: The way that I think our franchise and our platform is differentiated Dennis do you want do you want to add anything to those comments. So I think I think its well covered I mean, I think there was there's been a lot of discussion over the past of the past year or sort of private credit versus syndicated alternative but the reality of the syndicated alternative it didn't really exist and so it was really just the <unk>.

David Solomon: It's well covered. I mean, I think there's been a lot of discussion over the past year of sort of private credit versus syndicated alternative, but the reality is that the syndicated alternative didn't really exist.

Denis P. Coleman: And so it was really just a discussion around private credit. With first quarter activity levels, you now see a viable, functioning, and healthy syndicated loan market. The vast majority of the activity was actually refinancing, and a lot of that refinancing was refinancing private credit capital structures with the more attractive pricing available in the broad-based syndicated market. So the reality is these are all just forms of credit made available to different borrowers. And over time, I think there'll be a much more normalized mix, where you'll see underwritten as well as directly lent solutions, in some cases existing in the same capital structure. And I think we're just in a healthier environment. But from Goldman Sachs' perspective, it's positive because the data points that we now see across the leveraged lending market make the sponsor-estimated weighted average cost of capital much more observable. And that should unlock their ability to start to price and put together transactions that should fuel some incremental sponsor-related change-of-control activity. So I think the sort of two markets functioning side by side is good in terms of activity and what it means for Goldman Sachs.

Denis P. Coleman: Scutcheon around private credit with first quarter activity levels, you know see a viable functioning and healthy syndicated loan market. The vast majority of the activity was actually refinancing a lot of that refinancing was refinancing private credit capital structures with the more attractive pricing available in the broad based syndicated market.

Denis P. Coleman: So the reality is these are all just forms of credit made available to different borrowers.

Denis P. Coleman: And over time, I think there'll be a much more normalized mix, where you'll see underwritten as well as directly linked solutions in some cases existing in the same capital structure.

Denis P. Coleman: We're just in a healthier environment, but from Goldman Sachs's perspective is positive because the data points that we now see across the leverage lending market make sponsor estimated weighted average cost of capital much more.

Denis P. Coleman: Observable and that should unlock their ability to start to price and put together transactions that should.

Denis P. Coleman: Some incremental sponsor related change of control activities. So I think the sort of two markets functioning side by side is good in terms of activity and what it means on the forward for Goldman Sachs.

Steven Joseph Chubak: Now, really helpful, Culler, and for my follow-up, just on capital management, if CET1 continues to build, you're well in excess of the regulatory minimums, the direction of travel on Basel III, in terms of expectations around the proposal, certainly more favorable. At the same time, it now looks like you might be more constrained by the SLR, which declined to 5.4%. I know that's never intended to be the binding constraint, but was hoping you could just speak to how you're managing to leverage the constraint, which at least appears to be binding at the moment, and what we should expect in terms of the pace of buyback, and whether that actually informs your expectation there.

Denis P. Coleman: Really helpful color and for my follow up just on capital management, you see Q1 continues to build you're well in excess of the regulatory minimums the direction of travel on Basel III in terms of expectations around the proposal is certainly more favorable at the same time and now it looks like you might be more constrained by the S. M.

Denis P. Coleman: <unk>, which declined to five 4% I know that's never intended to be the binding constraint, but was hoping you could just speak to how you are managing to a leverage constraint, which at least appears to be binding at the moment and what we should expect in terms of the pace of buyback and whether that actually informs your expectation there.

Devin Patrick Ryan: Thanks, Steven. So yeah, you're right on all counts. You know, obviously, we have a variety of both capital and liquidity ratios that we manage to keep track of over time. The SLR is a slower moving ratio, as you know, but our bindingness can move back and forth between various ratios over time. And we have a bunch of levers that we can pull with respect to our activities to manage that. But I appreciate the question.

Speaker Change: Sure. Thanks, Thanks, Steven So, yes, you're right on all on all counts.

Speaker Change: Obviously, we have a variety of both capital and liquidity ratios that we manage to overtime. The SLR is a slower moving ratio as you know, but our binding this can move back and forth between various ratios over time, and we have a bunch of levers that we can that we can pull with respect to our activities.

Speaker Change: To manage that.

Speaker Change: But I appreciate the question.

David Solomon: Thank you. We'll go next to Devin Ryan with Citizens JMP.

Speaker Change: Thank you we'll go next to Devin Ryan with citizens J M P.

Devin Patrick Ryan: Great, thanks so much. First question, just kind of maybe a bigger picture on the wallet sharing markets. I know this has really been ongoing work for the firm, and obviously not just the quarter, but really the past few years, this has been a pretty consistent story. So if we kind of move aside financing, you know, love to maybe just drill down into some of the individual products that are accelerating in equities and FIC, and where you're most pleased with the execution that has occurred over the last several years, and then you're still where you Thanks.

Devin Patrick Ryan: Alright, great. Thanks, so much.

Devin Patrick Ryan: First question just on kind of maybe a bigger picture on the wallet share in markets. I know this has really been ongoing work for the firm and obviously not just the quarter, but really the past few years. This has been pretty consistent story. So if we kind of move aside financing.

Devin Patrick Ryan: What does it maybe just drill down in some of the individual products that are accelerating in equities in FIC and where you're most pleased with the execution that has occurred over the last several years and then you still where you see the biggest room to close any gaps that are that are maybe still there. Thanks.

David Solomon: Well, at a high level, and this was one of the things that we observed that I think we got right over a period of time, you know, that we started with the top 100, and we're now focused on the top 150 clients in this business. The top 150 clients provide a very significant portion of all the activity in this franchise. And so your share with them and managing the share with them has a big impact on your wallet shares.

Devin Patrick Ryan: At a high level and this was one of the things that we observed and I think we got right over a period of time.

Devin Patrick Ryan: The that we started with the top 100, we're now focused on the top 150 clients in these businesses the top the top 150 clients provide a very significant portion of all the activity in this in this franchise and so your share with them and managing the share with them as a big impact on your wallet share is I think the you know.

David Solomon: I think the thing that we've done well and that we see is really the case is that they all operate across all products and all activities and all silos. And the ability to create a very seamless experience for them across the firm is a big change for us, you know, versus where we might have been a decade ago. And so, you know, it's something we're very focused on. There are times when, you know, there's more activity in commodities, there are times when there's more activity in credit, there are times when there's more activity in mortgages, you know. It moves, and it ebbs and flows.

The thing that we've done well in that we see is really the case is that they all operate across all products and all activities in all silos and the ability to create a very seamless experience for them across the firm is a big change for us versus where we might have been a decade ago. So.

Devin Patrick Ryan: Something we're very focused on there are times when there's more activity in commodities, there's time when there's more activity in credit there is time, when there's more activity mortgages.

Devin Patrick Ryan: Moves and it ebbs and flows but what we're really trying to do is to make sure. We have the full package to serve them in the most effective way and we've made real progress in that over the course of the you know the last couple of years I think the opportunity for us to continue to make progress comes from the fact that in the top 150, I think we stand at slightly under top three with.

David Solomon: But what we're really trying to do is to make sure we have the full package to serve them in the most effective way. And we've made real progress on that over the course of the, you know, last couple of years. You know, I think the opportunity for us to continue to make progress comes from the fact that in the top 150, I think we stand slightly under the top three with 117 of them. Don't be open to that number.

Devin Patrick Ryan: 117 of them don't.

Devin Patrick Ryan: We are open to that number exactly 500 stepped up okay 117 of them.

David Solomon: Okay, 117 of them. So obviously, you know, we have progress because there's no reason why Goldman Sachs shouldn't be in the top three, you know, with the overwhelming majority, you know, much closer to, you know, 90% of those 150. And also, when you look at the top three, there are also, you know, clients where we're third, and we absolutely should be first or second. So we continue to drill down, we continue to go, talk to our clients, listen to our clients, and get feedback on how we can do a better job serving them. And, you know, that discipline and that rigor, I think, are helping us execute for them, but there's more work to do, and we don't take our position for granted. We try to create the right culture of, you know, focus and intensity that allows us to continue to deliver and execute for them.

Devin Patrick Ryan: So obviously, we have we have progress to make.

There's no reason why Goldman Sachs Shouldnt be top three.

Devin Patrick Ryan: With the overwhelming majority you know much closer to you know.

Devin Patrick Ryan: 90% of those those 150 and also when you look at top three there are also.

Clients, where we're third when we absolutely should be first or second so we continue to drill down we continue to go talk to our clients listen to our clients get feedback on how we can do a better job serving them and that discipline and that rigor.

Devin Patrick Ryan: It is helping us execute for them, but there's more work to do and we don't take our position for granted.

Devin Patrick Ryan: Try to create the right culture of.

Devin Patrick Ryan: <unk>.

Devin Patrick Ryan: Of of focus and intensity that allows us to continue to deliver and execute for them.

Devin Patrick Ryan: Okay, great. Thanks, David.

Speaker Change: Yeah, Okay, great. Thanks, David.

Denis P. Coleman: Maybe a quick follow-up here for Denis. Just on the equity investments line, not a great quarter there, but not a drag either. It feels like it's been some time since we've seen maybe a more normal quarter without big puts and takes. And so, just given the reconstitution of that book, how would you frame what a more normal quarter should look like from a revenue perspective? And then how is the private portfolio positioned if we are moving into a better exit environment? Obviously, it's been tough there as well. Thanks.

Speaker Change: Maybe a quick follow up here for Dennis just on the equity investments line.

Speaker Change: Not a great quarter, there not a drag either it feels like it's been some time since we've seen maybe a more normal quarter without their big puts and takes and so just given the reconstitution of that book, how would you frame what a more normal quarter should look like from a revenue perspective, and then how the private portfolio was positioned if we are moving into a better.

Speaker Change: Actually the environment, obviously, it's been tough there as well thanks.

Denis P. Coleman: Sure, thanks for the question. So a couple of things, and it may have been embedded in your question, but obviously looking at some of the progress in the equity investments line on a sequential basis, just a reminder that in Q4, when we sold personal financial management, that was reflected as a gain in equity investments, about $350 million. That did not repeat. So that'll give you some insight into how that's trending sequentially.

Speaker Change: Sure. Thanks. Thanks for the question. So a couple of things and it may have been embedded in your question, but obviously looking at some of the other progress in the equity investments line on a on a sequential basis. Just a reminder that in in Q4, when we sold personal financial management that was reflected as a gain in equity investments.

Speaker Change: $350 million that did not repeat.

Speaker Change: So that'll give you some incentives or some insight into how that's trending sequentially on a year over year basis, we are seeing performance in the private portfolio sort of in line with what you're suggesting we might expect and but we did see.

Matt O'connor: We'll go next to Matt O'Connor with Deutsche Bank. Good morning.

Matt O'connor: Actually, just to follow up on the last question and comment, the runoff of the historical principal investment from the $15 billion here, the $2 billion that you just referenced, is that the runoff that you expect, or was I alluding to revenues per year?

Speaker Change: A particular markdown in the public portfolio that sort of netted into the ultimate equity investment results.

Speaker Change: We also as you know we've been focused on selling down a portion of our historical principal investments. So you know a combination of the ultimate size of the notional remaining in our portfolio combined with what the what the market conditions are obviously contemplate contribute to the ultimate performance.

Denis P. Coleman: Sure, thanks. Let me clarify. I was making a comment with respect to revenue. And then separately, as it relates to the rundown of that portfolio, I guess the way to think of it picking up questions from last earnings and or this one, you know, the progress that we made in the first quarter of roughly a billion and a half, we think that's a decent assumption for the pace over the course of this year. And then we just, you know, reiterated our commitment to selling down substantially all of it in line with our target.

Speaker Change: The guidance that we've put out there generally you know medium term guidance is that across both equity and debt investments youre looking at a number of about $2 billion a year. So you could put that in the quarter about $500 million those are some.

Speaker Change: Pieces of color I'd give you.

Matt O'connor: We'll go next to Matt O'connor with Deutsche Bank.

Matt O'connor: Good morning, actually just a follow up on the last question and comment.

Denis P. Coleman: Okay, so what one and a half billion per quarter is what you're implying from here for the rest of the year?

Matt O'connor: Run off of the historical principal investments from the 15 billion here.

Matt O'connor: 2 billion that you just referenced is that the run off of it you expect or was that alluding to the revenues per year.

Denis P. Coleman: On the historical principal investment portfolio, yeah, we would expect something roughly in line with a billion and a half per quarter for the balance of the year.

Matt O'connor: Sure. Thanks, Let me clarify I was making a comment with respect to revenue and then separately as it relates to the rundown of that portfolio I guess, the way to think of it picking up questions from from last earnings and or this one.

Saul Martinez: We'll go next to Saul Martinez with HS. Hi, thanks for taking my question. I wanted to ask about your financing business and markets, and, you know, obviously there's uncertainty about the Basel endgame proposal. As you mentioned, the direction of travel seems to be for it to be materially lightened or even repealed.

Matt O'connor: The progress that we made in the first quarter of roughly 1 billion and a half we think that's decent assumption for the pace over the course of this year and then we just reiterated our commitment to selling down substantially all of it in line with our target.

Speaker Change: Okay, So what one and a half billion per quarter.

Speaker Change: It was like you're implying from here for the rest of the year.

Speaker Change: On the historical principal investment portfolio, Yeah, we would expect something roughly in line with the 1 billion and a half per quarter for the balance of the year.

Denis P. Coleman: But one of the areas where it is very punitive versus other jurisdictions is in securities financing, the risk weightings for unlisted entities. And, you know, if that part of the proposal isn't materially altered, and it doesn't seem like it necessarily is a focus, does that impact your ability to grow your financing revenues? Is it a threat?

Speaker Change: We'll go next to Sol Martinez with HSBC.

Saul Martinez: Hi, Thanks for taking my question one.

Saul Martinez: I wanted to ask about your financing business in markets and obviously there is uncertainty about the Basel and gained proposal as you mentioned the direction of travel seems to be for it to be materially lightened or even re propose but one of the areas where it is very punitive versus other jurisdictions is in securities financing.

Saul Martinez: The risk weightings for them listed entities.

Part of the proposal isn't materially alter and it doesn't seem like it isn't necessarily the focus.

Saul Martinez: Does that impact your ability to grow your your your financing revenues is it is it a threat is not a big deal can you.

Saul Martinez: [inaudible]

Denis P. Coleman: So obviously, where Basel III ends up and what components of the rule actually are put in place and how they're drafted and how they're calculated, etc., will be highly decisive. But I'd say the breadth of our financing activities across both FICs and equity is much broader than that particular component. And we expect that the underlying demand from our clients for financing across both FICs and equities will remain high. We have leading market shares and capabilities there, so we'll expect to be able to deliver in that regard. And depending on where various pieces of regulation end up, we'll make whatever adjustments we need, either to pricing or the mix of our businesses, or look for other ways to serve our clients.

Saul Martinez: Offset it through pricing product is I'm just curious if you if you could provide a little color on that.

Saul Martinez: Right.

Saul Martinez: Or.

Saul Martinez: So obviously, where we're Basel III ends up and what components of the rule actually are put in place and how they're how they're drafted and how they calculate et cetera will be highly determinative, but I'd say the breadth of our financing activities across both debt and equity are much broader than that particular component and.

Saul Martinez: And we expect that the underlying demand from our clients for financing across both <unk> and equities will remain high we have leading market shares and capabilities. There. So we'll expect to be able to deliver in that regard.

Saul Martinez: And depending on where various pieces of regulation and up we'll make whatever adjustments, we need either to pricing or the mix of our businesses are looked for other ways to serve our clients.

Saul Martinez: Okay, thanks, that's helpful. And then maybe just, you know, following up on PASL and the implications of it being soft, and Dennis, you mentioned, more flexibility on capital deployment. Given the direction of travel on PASL, I mean, how should we be thinking about buyback activity from here? Did one and a half billion? Do you feel like there is scope to increase that? And potentially bring your payout ratio, you know, even closer to 100% earnings?

Saul Martinez: Okay.

Okay. Thanks, that's helpful and then maybe just.

Speaker Change: Following up on Pogo and the implications of it being soft and then as you mentioned.

Speaker Change: More flexibility on capital deployment.

Speaker Change:

Speaker Change: Innocent given.

Speaker Change: Given given the direction of travel on Basel, I mean, how should we be thinking about buyback activity from here. You did one 5 billion is there do you feel like there is scope to increase that and potentially bring your payout ratio.

Speaker Change: Closer to 100% of earnings.

Denis P. Coleman: Sure, I appreciate the question. We were deliberate in our script remarks about the degree of capital flexibility that we expected, but I'll pick up on something that David said earlier in the call, which is that we remain very committed to our capital deployment hierarchy, which starts with our client franchise. And some of the activities where historically we've been able to deploy capital have been less active. And so we have a good amount of cushion and flexibility at this point in time. As our clients become more active, the first place that we're going to look to deploy our capital is to support our clients and their activities. And after that, we would, of course, as you know, continue to be focused on a sustainable and growing dividend. And only after that would we think about the return of capital.

Alright I appreciate the question that we were we were deliberate in our in our script remarks about the degree of capital flexibility that we expected, but also pick up on something that David said earlier on the call, which is that we remain very committed to our capital deployment hierarchy, which which starts with our client.

Speaker Change: <unk> and some of the activities, where historically, we've been able to deploy capital had been less active and so we have a you know a.

Speaker Change: Good amount of cushion and flexibility at this point in time as our clients become more active the first place that we're going to look to deploy our capital is to support our clients and their activities.

Speaker Change: And that after that we would of course as you know continue to be focused on a sustainable and growing dividend and only after that what do we think about return of capital.

Saul Martinez: Thank you. At this time, there are no further questions. Ladies and gentlemen, this concludes the Goldman Sachs first quarter 2024 earnings conference call. Thank you for your participation. You may now disconnect.

Speaker Change: Thank you at this time there are no further questions ladies and gentlemen. This concludes the Goldman Sachs first quarter 2024 earnings conference call.

Speaker Change: Thank you for your participation you may now disconnect.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Yeah.

Speaker Change: [music].