Q3 2025 The Goldman Sachs Group Inc Earnings Call

Speaker #2: Good morning, my name is Katie, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs Third Quarter 2025 Earnings Conference 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 Third Quarter 2025 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, October 14, 2025. 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.

Speaker #2: 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.

Speaker #2: 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, October 14th, 2025.

Speaker #2: 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.

Speaker #3: Thank you very much, Operator, and good morning, everyone. Thank you all for joining us. We delivered very strong results in the third quarter. And generated net revenues of $15.2 billion.

David Solomon: Thank you very much, Operator, and good morning, everyone. Thank you all for joining us. We delivered very strong results in the third quarter and generated net revenues of $15.2 billion, earnings per share of $12.25, an ROE of 14.2%, resulting in an ROE of 14.6% and an ROE of 15.6% for the year to date. This performance reflects the strength of our market-leading franchises, where we continue to harness the power of One Goldman Sachs to serve our clients with excellence. In investment banking, we've seen increased momentum in our number one M&A franchise as clients turn to us for their most consequential transactions. Recently, we hit the milestone of advising on over $1 trillion in announced M&A volumes for 2025 year to date. This is $220 billion ahead of our next closest competitor and underscores our dominant position as the advisor of choice for clients.

Speaker #3: Earnings per share of $12.25, an ROE of 14.2%, resulting in an ROE of 14.6% and an ROE of 15.6% for the year to date.

Speaker #3: This performance reflects the strength of our market-leading franchises, where we continue to harness the power of one GOLDMAN SACHS to serve our clients with excellence.

Speaker #3: In investment banking, we've seen increased momentum, and our number one M&A franchise, as clients turn to us for their most consequential transactions. Recently, we hit the milestone of advising on over $1 trillion in announced M&A volumes for 2025, year to date.

Speaker #3: This is 220 billion dollars ahead of our next closest competitor, and underscores our dominant position as the advisor of choice for clients. We've built this leadership position through decades of investment in our dedicated teams across the globe.

David Solomon: We've built this leadership position through decades of investment in our dedicated teams across the globe. This allows us to advise our clients on their most important transactions. We were the exclusive advisor to Electronic Arts in its $55 billion sale to a consortium comprised of the Public Investment Fund of Saudi Arabia, Silver Lake, and Affinity Partners. We were also the lead advisor to Baker Hughes on its strategic acquisition of Chard Industries for $14 billion and advised and provided financing to Toma Bravo for its $12 billion leveraged buyout of Dayforce. Importantly, given our One Goldman Sachs operating approach, increased M&A activity creates a real multiplier effect. Whether it's bridge financing, derivative hedging, or investment opportunities for Asset & Wealth Management clients, our advisory relationships are often the genesis for client activities across the firm.

Speaker #3: This allows us to advise our clients on their most important transactions. We were the exclusive advisor to Electronic Arts in a $55 billion sale to a consortium comprised of the Public Investment Fund of Saudi Arabia, Silver Lake, and Affinity Partners.

Speaker #3: We were also the lead advisor to Baker Hughes on its strategic acquisition of Chard Industries for $14 billion and advised and provided financing for Thelma Grovo, Thelma Bravo, for its $12 billion leveraged buyout of Dave Force.

Speaker #3: Importantly, given our one Goldman Sachs operating approach, increased M&A activity creates a real multiplier effect, whether it's bridge financing, derivative hedging, or investment opportunities for asset and wealth management clients.

Speaker #3: Our advisory relationships are often the genesis for client activities across the firm. Looking forward, it's important to recognize the tailwinds behind our optimistic outlook for investment banking.

David Solomon: Looking forward, it's important to recognize the tailwinds behind our optimistic outlook for investment banking. We're encouraged by the steady build in sponsor activity, which is now tracking 40% higher versus last year. Considering that sponsors have over $1 trillion of dry powder and $4 trillion of private equity assets in their portfolios, coupled with the expected rate cuts in the U.S., the setup remains constructive. For corporates, it's clear from our conversations in boardrooms that after a period of heightened uncertainty and volatility early in the year, many of our clients have navigated and adapted to the current state of play. Though near-term policy considerations are still relevant, many CEOs have shifted their focus back to long-term and strategic decision-making, particularly amid a more supportive regulatory environment. Scale and investing for growth remain paramount, especially in the context of harnessing AI capabilities.

Speaker #3: We're encouraged by the steady build in sponsor activity, which is now tracking 40% higher versus last year. Considering that sponsors have over $1 trillion of dry powder and $4 trillion of private equity assets in their portfolios, coupled with the expected rate cuts in the U.S., the setup remains constructive.

Speaker #3: For corporates, it's clear from our conversations in boardrooms that after a period of heightened uncertainty and volatility early in the year, many of our clients have navigated and adapted to the current state of play.

Speaker #3: Though near-term policy considerations are still relevant, many CEOs have shifted their focus back to long-term and strategic decision-making, particularly amid a more supportive regulatory environment.

Speaker #3: Scale and investing for growth remain paramount, especially in the context of harnessing AI capabilities. In addition to a robust investment banking backdrop, we've seen continued strength across our leading tech and equities businesses, which in total rose on a year-over-year basis for the seventh consecutive quarter.

David Solomon: In addition to a robust investment banking backdrop, we have seen continued strength across our leading FICC and equities businesses, which in total rose on a year-over-year basis for the seventh consecutive quarter. Much of the momentum from the first half of the year persisted through the summer and into September, contributing to our record year-to-date performance for equities and notable strength in our rates business within FICC. All in, our markets businesses continue to demonstrate resilience that comes from having a global, broad, and deep franchise. Taking a step back, there is no question that there is a fair amount of investor exuberance at the moment, with U.S. equity markets consistently hitting record highs over the last several months. Much of this has been fueled by a tremendous amount of investment in AI infrastructure, which has driven significant capital formation.

Speaker #3: Much of the momentum from the first half of the year persisted through the summer and into September, contributing to our record year-to-date performance. For equities, a notable strength in our rates business was in FIC.

Speaker #3: All in, our markets businesses continue to demonstrate resilience. This comes from having a global, broad, and deep franchise. Taking a step back, there is no question that there's a fair amount of investor exuberance at the moment, with U.S. equity markets consistently hitting record highs over the last several months.

Speaker #3: Much of this has been fueled by a tremendous amount of investment in AI infrastructure, which has driven significant capital formation. But as students of history, we know the following periods of broad-based excitement around new technologies that will ultimately be a divergence where some ventures thrive and others falter.

David Solomon: As students of history, we know the following periods of broad-based excitement around new technologies, there will ultimately be a divergence where some ventures thrive and others falter. While I feel good about the forward outlook on balance, the market operates in cycles, and disciplined risk management is imperative. We are especially vigilant in times like these to proactively manage risks as we continue to serve clients with our best-in-class execution capabilities and insights. In Asset & Wealth Management, we are relentlessly driving forward our growth strategy. Assets under supervision rose to a record $3.5 trillion. We again delivered record results across our more durable revenues and management and other fees in Private Banking and Lending. In alternatives, we raised a record $33 billion in the quarter. As a result, we now expect to raise approximately $100 billion in alternatives this year, substantially exceeding our prior full-year fundraising expectations.

Speaker #3: While I feel good about the forward outlook on balance, the market operates in cycles, and disciplined risk management is imperative. We are especially vigilant in times like these to proactively manage risks as we continue to serve clients with our best-in-class execution capabilities and insights.

Speaker #3: In asset wealth management, we are relentlessly driving forward our growth strategy. Assets under supervision rose to a record $3.5 trillion. We again delivered record results across our more durable revenues and management and other fees and private banking and lending.

Speaker #3: An alternative we raised a record $33 billion in the quarter. As a result, we now expect to raise approximately $100 billion in alternatives this year, substantially exceeding our prior full-year fundraising expectations.

Speaker #3: In wealth, client assets rose to a record $1.8 trillion as we continue to grow our advisor footprint and expand our suite of client offerings.

David Solomon: In wealth, client assets rose to a record $1.8 trillion as we continue to grow our advisor footprint and expand our suite of client offerings. It is clear that we've been making very strong progress in enhancing our business mix by growing our more durable revenues in AWM. We are also accelerating our growth via innovative partnerships and acquisitions. Yesterday, we announced the acquisition of Industry Ventures, a leading venture capital platform with a track record of strong investment performance and the proven ability to invest across all stages of the VC lifecycle. This transaction complements our market-leading secondaries investing franchise. We have been a pioneer for over 25 years and adds a highly attractive technology investment capability to the platform.

Speaker #3: It is clear that we've been making very strong progress in enhancing our business mix by growing our more durable revenues in AWM. We are also accelerating our growth via innovative partnerships and acquisitions.

Speaker #3: Yesterday, we announced the acquisition of Industry Ventures, a leading venture capital platform with a track record of strong investment performance and the proven ability to invest across all stages of the VC lifecycle.

Speaker #3: This transaction complements our market-leading secondaries investing franchise, where we have been a pioneer for over 25 years, and has a highly attractive technology investment capability to the platform.

Speaker #3: This business will sit in our external investing group, or XIG, which has over 450 billion in assets under supervision across asset classes and is a market leader in investing in alternative managers' strategies secondaries co-investments and GP stakes.

David Solomon: This business will sit in our External Investing Group, or XIG, which has over $450 billion in assets under supervision across asset classes and is a market leader in investing in alternative manager strategies, secondaries, co-investments, and GP stakes. Importantly, facilitated by our One Goldman Sachs approach, Industry Ventures' deep relationships across the VC ecosystem have the potential to drive new opportunities for the firm, particularly in investment banking and Wealth Management. Additionally, last month, we announced a strategic collaboration with T. Rowe Price to deliver a range of public and private market solutions designed for the unique needs of retirement and wealth investors. We are thrilled to partner with T. Rowe, which, like Goldman Sachs, has a strong brand with a long track record of success across investing in capital markets and in producing strong investment returns for clients.

Speaker #3: Importantly, facilitated by our one GOLDMAN SACHS approach, Industry Ventures' deep relationships across the VC ecosystem have the potential to drive new opportunities for the firm particularly in investment banking and wealth management.

Speaker #3: Additionally, last month we announced the strategic collaboration with T. Rowe Price to deliver a range of public and private market solutions designed for the unique needs of retirement and wealth investors.

Speaker #3: We are thrilled to partner with T. Rowe, which, like GOLDMAN SACHS, has a strong brand with a long track record of success across investing in capital markets, and in producing strong investment returns for clients.

Speaker #3: With our 30 years of experience in private markets and an ability to blend asset classes to address outcome-oriented objectives, we can help bridge the gap between growth opportunities in private markets and the needs of individual investors.

David Solomon: With our 30 years of experience in private markets and an ability to blend asset classes to address outcome-oriented objectives, we can help bridge the gap between growth opportunities in private markets and the needs of individual investors. As we drive growth across our businesses, operating efficiency remains one of our key strategic objectives. Although we review our operations on an ongoing basis, it is also important to make long-term decisions that best position the firm for the future, especially as rapidly accelerating advancements in technology present significant opportunities. To this end, earlier this morning, we announced to our people the launch of One Goldman Sachs 3.0. Propelled by AI, this is a new, more centralized operating model that we expect to drive efficiencies and create capacity for future growth.

Speaker #3: As we drive growth across our businesses, operating efficiency remains one of our key strategic objectives. Although we review our operations on an ongoing basis, it is also important to make long-term decisions that best position the firm for the future, especially as rapidly accelerating advancements in technology present significant opportunities.

Speaker #3: To this end, earlier this morning, we announced to our people the launch of one Goldman Sachs 3.0. Propelled by AI, this is a new, more centralized operating model that we expect to drive efficiencies and create capacity for future growth.

Speaker #3: This is a multi-year effort that we will build over time, and we plan to measure our progress across six goals: enhancing client experience, improving profitability, driving productivity and efficiency, strengthening resilience and capacity to scale, enriching the employee experience, and bolstering risk management.

David Solomon: This is a multi-year effort that we will build over time, and we plan to measure our progress across six goals: enhancing client experience, improving profitability, driving productivity and efficiency, strengthening resilience and capacity to scale, enriching the employee experience, and bolstering risk management. To start, we are drilling in on a handful of front-to-back work streams that can significantly benefit from AI-driven process re-engineering and will help inform our longer-term approach. These include priorities such as sales enablement and client onboarding that directly impact the client experience, as well as other critical areas that have touch points across the firm. For example, our lending processes, regulatory reporting, and vendor management. We've been successful by not just adapting to change, but anticipating it and evolving the firm's operating model as part of the long-term discipline that our people, clients, and shareholders expect of Goldman Sachs.

Speaker #3: To start, we are drilling in on a handful of front-to-back work streams that can significantly benefit from AI-driven process re-engineering and will help inform our longer-term approach.

Speaker #3: These include priorities such as sales enablement and client org onboarding that directly impact the client experience, as well as other critical areas that have touchpoints across the firm.

Speaker #3: For example, our lending processes, regulatory reporting, and vendor management. We have been successful by not just adapting to change, but anticipating it, and evolving the firm's operating model as part of the long-term discipline that our people, clients, and shareholders expect of GOLDMAN SACHS.

Speaker #3: We will provide you with an update with additional details on our call in January. While we've made significant progress on our strategic priorities, we will continue to execute.

David Solomon: We will provide you with an update with additional details on our call in January. While we've made significant progress on our strategic priorities, we will continue to execute. The foundation we've laid to grow and strengthen the firm, coupled with our market-leading franchises and best-in-class talent, gives me confidence in our ability to deliver for clients and drive strong performance for shareholders. I will now turn it over to Denis to cover our financial results for the quarter.

Speaker #3: The foundation we've laid to grow and strengthen the firm, coupled with our market-leading franchises and best-in-class talent, gives me confidence in our ability to deliver for clients and drive strong performance for shareholders.

Speaker #3: I will now turn it over to Denis to cover our financial results for the quarter.

Speaker #4: Thank you, David. Good morning. Let's start with our results on page one of the presentation. In the third quarter, we generated net revenues of $15.2 billion, earnings per share of $12.25, an ROE of 14.2%, and an ROTE of 15.2%.

Denis Coleman: Thank you, David. Good morning. Let's start with our results on page one of the presentation. In the third quarter, we generated net revenues of $15.2 billion, earnings per share of $12.25, an ROE of 14.2%, and an ROTE of 15.2%. Let's turn to performance by segment, starting on page three. Global Banking and Markets produced revenues of $10.1 billion in the quarter, with an ROE for the year to date of 17%. Turn to page four. Advisory revenues of $1.4 billion were very strong, up 60% versus a year ago, reflecting a significant increase in completions in the quarter. Year to date, we remain number one in the league tables for announced and completed M&A, not only globally, but in each of the Americas, EMEA, and APAC.

Speaker #4: Let's turn to performance by segment, starting on page three. Global banking and markets produced revenues of $10.1 billion in the quarter, with an ROE for the year to date of 17%.

Speaker #4: Let's turn to page four. Advisory revenues of $1.4 billion were very strong, up 60% versus a year ago. Reflecting a significant increase in completions in the quarter.

Speaker #4: Year to date, we remain number one in the league tables for announced and completed M&A, not only globally, but in each of the Americas, EMEA, and APAC.

Speaker #4: Equity underwriting revenues of $465 million were up 21% year over year on significant pickup in IPO activity. As we price some of the most highly anticipated IPOs, including Klarna, Figma, and Figure Technologies.

Denis Coleman: Equity underwriting revenues of $465 million were up 21% year over year on significant pickup in IPO activity, as we price some of the most highly anticipated IPOs, including Klarna, Figma, and Figure Technologies. More broadly, we're pleased to see the broad-based recovery in the IPO market pick up steam. Debt underwriting revenues of $788 million rose 30%, primarily reflecting higher leveraged finance activity. While acquisition-related activity is picking up amid more deal announcements, there is more room to run, which plays to our strengths as a firm. Year to date, we rank second in high-yield debt underwriting and leveraged lending. Across investment banking, we continue to see strong momentum, with our quarter-end backlog at its highest level in three years, despite very strong accruals. FICC net revenues were $3.5 billion in the quarter, up 17% year over year.

Speaker #4: More broadly, we are pleased to see the broad-based recovery in the IPO market pickup scheme. Debt underwriting revenues of $788 million rose 30%, primarily reflecting higher leveraged finance activity.

Speaker #4: While acquisition-related activity is picking up amid more deal announcements, there is more room to run. We've placed our strengths as a firm. Year to date, we rank second in high-yield debt underwriting and leveraged lending.

Speaker #4: Across investment banking, we continue to see strong momentum. With our quarter-end backlog at its highest level in three years, despite very strong accruals, FIC net revenues were $3.5 billion in the quarter, up 17% year over year.

Speaker #4: Intermediation results were driven by improved performance in rates, mortgages, and commodities, partially offset by lower results in currencies and credit products. FIC financing revenues of $1 billion were driven by strong results in mortgages and structured lending.

Denis Coleman: Intermediation results were driven by improved performance in rates, mortgages, and commodities, partially offset by lower results in currencies and credit products. FICC financing revenues of $1 billion were driven by strong results in mortgages and structured lending. Equities net revenues were $3.7 billion in the quarter. Equities intermediation revenues of $2 billion fell 9% year over year, driven by lower revenues in cash products, partially offset by better performance in derivatives. Record equities financing revenues of $1.7 billion were 33% higher year over year, amid record average prime balances for the quarter. Total financing revenues of $2.8 billion rose 23% versus the prior year, as we continue to deploy resources to grow FICC financing and bolster our leading position in equities financing while maintaining a keen eye on risk management. These revenues comprise nearly 40% of overall FICC and equities revenues. Let's turn to page five.

Speaker #4: Equities net revenues were Record equities financing revenues of 40% of overall FIC and equities revenues. Let's turn to page five. Asset and wealth management revenues in the quarter were $4.4 billion.

Speaker #4: 3.7 billion in the quarter. Equities intermediation revenues of $2 billion fell 9% year over year, driven by lower revenues in cash products, partially offset by better performance in derivatives.

Denis Coleman: Asset & Wealth Management revenues in the quarter were $4.4 billion. Management and other fees were up 12% year over year to a record $2.9 billion on higher average assets under supervision. Private banking and lending revenues were $1.1 billion. Excluding the payment of interest on a previously impaired loan, year-to-date revenues were up in the high single digits year over year, driven by higher net interest income from lending to our ultra-high net worth clients. In aggregate, our revenues across management and other fees and private banking and lending totaled a record $4 billion in the quarter and $11 billion for the year to date. We continue to expect growth in the high single digits on an annual basis over the medium term. In the AWM segment, we generated a 23% pre-tax margin and a 10.5% ROE for the year to date.

Speaker #4: Management and other fees were up 12% year over year, to a record $2.9 billion, driven by higher average assets under supervision. Private banking and lending revenues were $1.1 billion.

Speaker #4: Excluding the payment of interest on a previously impaired loan, year to date revenues were up in the high single digits year over year. Driven by higher net interest income from lending to our ultra-high network clients.

Speaker #4: In aggregate, our revenues across management and other fees, and private banking and lending totaled a record $4 billion in the quarter, and $11 billion for the year to date.

Speaker #4: We continue to expect growth in the high single digits on an annual basis over the medium term. In the AWM segment, we generated a 23% pre-tax margin, and a 10 and a half percent ROE for the year to date.

Speaker #4: Excluding the impact of HPI and its $3.6 billion of average attributed equity, our pre-tax margin and ROE would have been approximately $150 and $250 basis points higher, respectively.

Denis Coleman: Excluding the impact of HPI and its $3.6 billion of average attributed equity, our pre-tax margin and ROE would have been approximately 150 and 250 basis points higher, respectively. Now moving to page six. Total assets under supervision ended the quarter at a record $3.5 trillion, up sequentially on $80 billion of net market appreciation, as well as $56 billion of long-term net inflows across asset classes, representing our 31st consecutive quarter of long-term fee-based net inflows. Turning to page seven on alternatives. Alternative assets under supervision totaled $374 billion at the end of the third quarter, driving $597 million in management and other fees. Gross third-party alternatives fundraising was a record $33 billion in the quarter, driven by demand across strategies, including private equity and credit, bringing year-to-date fundraising to $70 billion. On page nine, firm-wide net interest income was $3.9 billion in the third quarter.

Speaker #4: Now moving to page six. Total assets under supervision ended the quarter at a record $3.5 trillion. Up sequentially on $80 billion of net market appreciation, as well as $56 billion of long-term net inflows across asset classes.

Speaker #4: Representing our 31st consecutive quarter of long-term fee-based net inflows. Turning to page seven on alternatives. Alternative assets under supervision totaled $374 billion at the end of the third quarter, driving $597 million in management and other fees.

Speaker #4: Gross third-party alternatives fundraising was a record $33 billion in the quarter, driven by demand across strategies, including private equity and credit, bringing year-to-date fundraising to $70 billion.

Speaker #4: On page nine, firm-wide net interest income was $3.9 billion in the third quarter. Our total loan portfolio at quarter-end was $222 billion, up modestly versus the second quarter.

Denis Coleman: Our total loan portfolio at quarter end was $222 billion, up modestly versus the second quarter. Our provision for credit losses of $339 million primarily reflected net charge-offs in our credit card portfolio. Turning to expenses on page 10, total quarterly operating expenses were $9.5 billion. Our year-to-date compensation ratio net of provisions is 32.5% and represents our best estimate for the full year, inclusive of higher severance costs. A 100 basis point improvement year over year reflects stronger revenue performance. Quarterly non-compensation expenses of $4.8 billion rose 14% year over year, driven by higher transaction-based costs, as well as charitable giving and higher litigation expenses. Our effective tax rate for the year to date was 21.5%. For the full year, we continue to expect the tax rate of approximately 22%. Next, capital on slide 11.

Speaker #4: Our provision for credit losses of $339 million primarily reflected net charge-offs in our credit card portfolio. Turning to expenses on page ten, total quarterly operating expenses were $9.5 billion.

Speaker #4: Our year-to-date compensation ratio, net of provisions, is 32.5% and represents our best estimate for the full year, inclusive of higher severance costs. The 100-basis-point improvement year-over-year reflects stronger revenue performance.

Speaker #4: Quarterly non-compensation expenses of $4.8 billion rose 14% year over year, driven by higher transaction-based costs, as well as charitable giving and higher litigation expenses.

Speaker #4: Our effective tax rate for the year to date was 21.5%. For the full year, we continue to expect a tax rate of approximately 22%.

Speaker #4: Next, capital on slide 11. In the quarter, we returned $3.3 billion to shareholders, including common stock dividends of $1.3 billion and common stock repurchases of $2 billion.

Denis Coleman: In the quarter, we returned $3.3 billion to shareholders, including common stock dividends of $1.3 billion and common stock repurchases of $2 billion. Our common equity tier one ratio was 14.4% at the end of the third quarter under the standardized approach. In the current regulatory framework, our CET1 requirement is 10.9%, though the NPR and CCAR averaging is still outstanding. In conclusion, given the continued execution on our strategic objectives, our market positioning, and the improving operating environment, we are confident in the outlook for our businesses. We are the number one M&A advisor globally, well-positioned to capitalize on the upswing in investment banking activity, which we expect in the next 12 to 24 months. We're delivering on our growth strategy to drive more durable revenues across Asset & Wealth Management. We are focused on efficiency and leveraging AI to meaningfully transform the firm.

Speaker #4: Our Common Equity Tier One ratio was 14.4% at the end of the third quarter under the standardized approach. In the current regulatory framework, our CET1 requirement is 10.9%.

Speaker #4: Though the NPR and CCAR averaging is still outstanding. In conclusion, given the continued execution on our strategic objectives, our market positioning, and the improving operating environment, we are confident in the outlook for our businesses.

Speaker #4: We are the number one M&A advisor globally, well-positioned to capitalize on the upswing in investment banking activity, which we expect in the next 12 to 24 months.

Speaker #4: We are delivering on our growth strategy to drive more durable revenues across AWM. We are focused on efficiency and leveraging AI to meaningfully transform the firm, all in the context of the improving regulatory backdrop, which should allow us to be on offense as we deploy resources and service our clients.

Denis Coleman: This is all in the context of the improving regulatory backdrop, which should allow us to be on offense as we deploy resources in service of our clients. Altogether, we remain confident in our ability to continue to deliver for shareholders. With that, we'll now open up the line for questions.

Speaker #4: Altogether, we remain confident in our ability to continue to deliver for shareholders. With that, we'll now open up the line for questions.

Speaker #1: Thank you. Ladies and gentlemen, we will now take a moment to compile the Q&A rush. Question. We'll take our first question from Glenn Shore with Evercore.

Katie: Thank you. Ladies and gentlemen, we will now take a moment to compile the Q&A rough. We'll take our first question from Glenn Schorr with Evercore.

Speaker #5: Hi, I wanted to follow up on your question about remaining especially vigilant and actively managing our set of times like these. I did notice some more news stories lately that you and others in the industry have been more active on the SRT front and synthetic risk transfer.

[Analyst 1]: Hi. I wanted to follow up on your question about remaining especially vigilant and actively managing risk at times like these. I did notice some more news stories lately that you and others in the industry have been more active on the SRT front and synthetic risk transfer. I wonder if we could talk about how you're executing that, especially vigilant on managing risk and what loans are moving off, potentially off balance sheet on these risk transfers. Just curious what's driving that other than just we're 17 years into a good cycle and valuations are high and things like that. Thanks.

Speaker #5: I wonder if we could talk about how you're executing that, especially being vigilant about managing risk and which loans are potentially moving off balance sheet with these risk transfers.

Speaker #5: Just curious what's driving that, other than just we're 17 years into a good cycle, and valuations are high and things like that.

Speaker #5: So thanks.

Speaker #4: Sure, Glenn, thanks. Thanks for the question. Look, there have been a number of articles on those transfers, including naming us. I would say that our practice is pretty unchanged and that we are constantly looking to dynamically risk-manage our portfolio of credit exposures.

Denis Coleman: Sure, Glenn. Thanks. Thanks for the question. Look, there have been a number of articles on those transfers, including naming us. I would say that our practice is pretty unchanged and that we are constantly looking to dynamically risk manage our portfolio of credit exposures. We have a variety of different tools that we use to risk manage and hedge that risk. SRT is one of those tools that's available to us. We're basically trying to ensure that the firm's in a position to continue to be able to support ongoing levels of client activity and prudently risk managing the existing portfolios. We think gives us the capacity to do that.

Speaker #4: We have a variety of different tools that we use to risk manage and hedge that risk. SRT is one of those tools that's available to us.

Speaker #4: We're basically trying to ensure that the firm's in a position to continue to be able to support ongoing levels of client activity and prudently risk-manage the existing portfolios. We think this gives us the capacity to do that.

Speaker #6: So, no flashing warning signs. It's just prudent risk management. It just so happens to be year-end, so you know, the Fed is cutting balance sheets, things like that—just keeping clean.

[Analyst 1]: No flashing warning signs. It's just prudent risk management. It just so happens to be year-end. You know, Fed cutting balance sheets, things like that, just keeping clean, good hygiene.

Speaker #6: Good hygiene.

Speaker #4: This is an ordinary course of risk management for us.

Denis Coleman: This is an ordinary course risk management for us.

Speaker #6: Okay, cool. The other clarifier I wanted to get was the messaging behind the 1GS 3.0. Meaning, normally you see some companies go through strong iterations of that when they're having some revenue issues.

[Analyst 1]: Okay, cool. The other clarifier I wanted to get was the messaging behind the One Goldman Sachs 3.0, meaning normally you see some companies go through strong iterations of that when they're having some revenue issues. You're not having any revenue issues. You've been putting up great numbers, and you talked about a great banking pipeline in the next 12 to 24 months. Is technology enabling this heightened awareness on efficiency in some of your AI investments? I'm just curious a little bit more about the why behind the One Goldman Sachs 3.0. We like it. I'm just curious. Yeah.

Speaker #6: You're not having any revenue issues. You talked about how you've been putting up great numbers and mentioned a strong banking pipeline in the next 12 to 24 months.

Speaker #6: Is technology enabling this heightened awareness of efficiency in some of your AI investments? I'm just curious about the reasoning behind the 1GS 3.0.

Speaker #6: We like it. I'm just curious.

Speaker #5: Yeah, thanks, Glenn, and I appreciate the question. And you know you've got it right. I think we're at a place where the evolution of the technology is allowing enterprises broadly, and I find this as I'm talking to CEOs all over the world, all businesses are focused on this because the technology actually allows you to take a fresh look, front to back, at certain operating processes and really reimagine them.

David Solomon: Thanks, Glenn. I appreciate the question. You've got it right. I think we're at a place where the evolution of the technology is allowing enterprises broadly, and I find this as I'm talking to CEOs all over the world. All businesses are focused on this because the technology actually allows you to take a fresh look front to back at certain operating processes and really reimagine. This has nothing to do, obviously, the firm's performing, the firm's growing. We feel very good about the execution, but we see this as an opportunity to use technology to automate, drive scale, create efficiency, and actually give us the capacity to invest more in the growth of our business. Our responsibility to shareholders is to grow earnings and to run the firm the best that we can. That doesn't matter whether it's good times or bad.

Speaker #5: And so this has nothing to do obviously with the firm's performance; the firm's growing, and we feel very good about the execution. However, we see this as an opportunity to use technology to automate, drive scale, create efficiency, and actually give us the capacity to invest more in the growth of our business.

Speaker #5: And so our responsibility to shareholders is to grow earnings and to run the firm, you know, the best that we can. That doesn't matter whether it's good times or bad, and you know, in order to execute on something like this, it's scaling the organization.

David Solomon: In order to execute on something like this at scale in the organization, you have to bring the organization along too. Part of the purpose, we've been working on this for a while. We've been talking about it as a leadership team. Part of the purpose of putting this out is it now allows us to talk more broadly and create a framework for the organization to understand the process that we're going to go through. I think there's enormous upside for our business here to allow further investment and growth. By the way, I think you're going to hear this from lots of companies and lots of industries that people are very focused on taking advantage of this acceleration in technology to really allow automation, efficiency, and therefore investment.

Speaker #5: You have to bring the organization along too. And so part of the purpose — we've been working on this for a while. We've been talking about it as a leadership team.

Speaker #5: Part of the purpose of putting this out is it now allows us to talk more broadly and create a framework for the organization to understand the process that we're going to go through. I think there's enormous upside for our business here to allow further investment and growth.

Speaker #5: And by the way, I think you're going to hear this from lots of companies and lots of industries, that people are very focused on taking advantage of this acceleration in technology to really allow automation, efficiency, and therefore investment.

Speaker #5: And by the way, this is one of the reasons why we're optimistic about the future. The productivity gains in the economy from enterprises finding ways to do this, you know, really I think are going to be very meaningful over the next few years, and that creates a good tailwind that will balance, you know, other macro factors that may or may not come into play.

David Solomon: This is one of the reasons why we're optimistic about the forward, the productivity gains in the economy from enterprises finding ways to do this, I think are going to be very meaningful over the next few years. That creates a good tailwind that will balance other macro factors that may or may not come into play.

Speaker #1: Thank you. We'll take our next question from Ibrahim Punawala with Bank of America.

Katie: Thank you. We'll take our next question from Ibrahim Punawala with Bank of America.

Speaker #6: Good morning. I guess if you could go back to, there's been obviously a lot of headlines and some right, some misplaced, around risks on the private credit side.

[Analyst 2]: Good morning. If you could go back to, there's been obviously a lot of headlines and some right, some misplaced around risks on the private credit side. I think, David, you have a Goldman Sachs has an interesting perspective given how long you've been in this space and you've seen the evolution of the space. Address it in two ways, if you could, please. One, when you think about the leverage that banks and Goldman Sachs provides to some of these players, how should shareholders think about the risk that at the back end you could suffer losses because of the lending to NDFIs? Secondly, does any of this cause you to kind of recalibrate how you're thinking about growing in the alls of the private credit business? Thank you.

Speaker #6: I think David, you have an interesting perspective, given how long you've been in this space and how you've seen the evolution of the space.

Speaker #6: Address it in two ways if you could, please. One, when you think about the leverage that banks and Goldman provide to some of these players, how should shareholders think about the risk that, at the back end, you could suffer losses because of the lending to NDFIs?

Speaker #6: And secondly, does any of this cause you to kind of recalibrate how you're thinking about growing in the ORES or the private credit business?

Speaker #6: Thank you.

Speaker #5: Yeah, I mean, I'll start. Denis can add you know some more granular detail, maybe comment you know just on some of the things that have been in the press more recently.

Denis Coleman: Yeah, I mean, I'll start. Denis can add some more granular detail, maybe comment just on some of the things that have been in the press more recently. First of all, we are in business to serve our clients, finance our clients, but all of this is underpinned by the fact that we have a very strong risk management culture, and strong underwriting is really central to everything that we do. It's important to take a step back. You asked about NDFIs. It's a very broad category. There are all sorts of different activities. We have a very, very diversified book of lending exposure. The vast majority of our lending is collateralized financing and investment-grade rated structures. The vast majority of it is investment-grade rated. We are constantly risk managing. We're constantly trying to create more capacity to do other things to support our clients.

Speaker #5: But you know first of all, you know we you know we're we're in business to serve our clients, finance our clients, but all of this is underpinned by the fact that we have a very strong risk management culture and strong underwriting is really central to everything that we do.

Speaker #5: So, you know it's important to take a step back, and you asked about NDFIs. It's a very broad category; there are all sorts of different activities.

Speaker #5: You know we have a very, very diversified book of lending exposure. The vast majority of our lending is collateralized financing and investment-grade rated structures.

Speaker #5: So, the vast majority of it is investment-grade rated. But, you know, we're constantly risk managing. We're constantly trying to create more capacity to do other things to support our clients.

Speaker #5: And we think about it as a broad, big, diversified portfolio. Obviously, if we entered a period where we had a credit cycle, which we have not had in quite some time, there would be headwinds for all the banks.

Denis Coleman: We think about it as a broad, big, diversified portfolio. Obviously, if you got into a period where we had a credit cycle, which we have not had in quite some time, there would be headwinds for all the banks. I think we feel very, very good about our processes, our collateral, the structure of the book, and a little bit back to the question that Glen Shore started with. We have a whole series of risk management processes that we constantly execute on to try to make sure we're being prudent at times like this. Denis, do you want to comment a little on some of the specific things that have been in the press and add anything to what I said?

Speaker #5: But I think we feel very, very good about our processes, our collateral, the structure, the book. And a little bit back to the question that Glenn Shore started with, we have a whole series of risk management processes that we constantly execute on to try to make sure we're being prudent at times like this.

Speaker #5: Denis, do you want to comment a little on some of the specific things that have been in the press and, you know, add anything to what I said?

Speaker #4: The only thing is to add that we know we obviously don't have any direct exposure to either of the big names that have been in the press.

[Company Representative]: The only thing is to add that, you know, we obviously don't have any direct exposure to either of the big names that have been in the press lately. Picking up on David's point, we've been in the business for a very long period of time. We've been lending through multiple cycles. Analyzing downside risk and doing consistent high-quality credit underwriting is key. The names in our portfolio are underwritten on a bespoke basis. We maintain very stringent standards with respect to our aggregate exposures, our diversification, our concentration risks, the attachment points, the collateral packages, the risk return characteristics, duration, et cetera. For us, we're maintaining our standards.

Speaker #4: Lately, and picking up on David's point, we've been in the business for a very long time. We've been lending through multiple cycles.

Speaker #4: And you know analyzing downside risk and doing, you know, consistent high-quality credit underwriting is key. The names in our portfolio are, you know, underwritten on a bespoke basis.

Speaker #4: And we maintain very stringent standards with respect to our aggregate exposures, our diversification, our concentration risks, the attachment points, the collateral packages, the risk-return characteristics, duration, etc.

Speaker #4: So for us, we're maintaining our standards. We've sat on multiple previous calls where we've had good opportunities to grow the FIC financing line, but we have said multiple times that the demand from our clients far outstrips the growth. We have maintained a level of selectivity with respect to credit selection and risk-return profiles, and that's still the case.

[Company Representative]: We've said on multiple previous calls that we've had good opportunities to grow the FICC financing line, but we have said multiple times that the demand from our clients far outstrips the growth, that we have maintained a level of selectivity with respect to credit selection, risk return profiles. That's still the case. Credit selection, being disciplined about that going in, is ultimately what protects you when inevitably certain things will go wrong.

Speaker #4: Credit selection—being disciplined about that from the outset—is ultimately what protects you when, inevitably, certain things go wrong.

Speaker #5: That's helpful. And I guess just one more thing: when we think about regulatory changes, we had the Treasury Secretary talk about this in a speech last week.

[Analyst 2]: That's helpful. I guess just one more. When we think about regulatory changes, we had the Treasury Secretary talk about this in a speech last week. Just give us a mark to market around your expectations as we think about the G-SIB surcharge and Basel endgame. How are you thinking about the timeline and capital planning around all of that? I think the bigger question that's come up with investors is, is the competitive positioning of Goldman Sachs getting better where you're not being buried with incrementally new regulations? When we think about Goldman Sachs competing with the non-banks across varied businesses, is that also just at the margin getting better? If you can comment on that, thank you.

Speaker #5: Just give us a mark-to-market around your expectations as we think about the G subsurcharge. And both the lend game, how are you thinking about the timeline and capital planning around all of that?

Speaker #5: And I think the bigger question that's come up with investors is: Is the competitive positioning of Goldman getting better, where you're not being buried with incrementally new regulations?

Speaker #5: And so, when we think about Goldman competing with the non-banks across a varied business, is that also just at the margin getting better, if you can comment on that?

Speaker #5: Thank you.

Speaker #6: Sure. I mean, on the second point, I absolutely think that the regulatory direction of travel is improving our competitive position significantly. On the timeline, you know it's harder to give you an exact timeline, but I'd say you're going to see real progress this fall and real progress during the first half of 2026.

Denis Coleman: Sure. On the second point, I absolutely think that the regulatory direction of travel is improving our competitive position significantly. On the timeline, it's harder to give you an exact timeline, but I'd say you're going to see real progress this fall and real progress during the first half of 2026. I would expect to have a very, very, very clear picture of a bunch of the regulatory issues that we're all focused on collectively over the course of the fall and the first half of 2026, into the end of the CCAR cycle next summer. I think we're certainly going to see SLR relief. I think we're certainly going to see more transparency around CCAR and a continued recalibration because of that. I think we're going to see a recalibration of GCIB. I think we're going to see a much more constructive Basel III endgame.

Speaker #6: I would expect to have a very, very, very clear picture of a bunch of the regulatory issues that we're all focused on collectively over the course of the fall and the first half of 2026, you know, into the end of the CCAR cycle, you know, next summer.

Speaker #6: I think we're certainly going to see SLR relief. I think we're certainly going to see more transparency around CCAR and a continued recalibration because of that.

Speaker #6: I think we're going to see a recalibration of GSIB. I think we're going to see a much more constructive Basel III end game. And obviously, the regulatory tone and the focus of resources that we have to direct toward regulatory is shifting in a way that we can redeploy those to other things that create avenues of growth.

Denis Coleman: Obviously, the regulatory tone and the focus of resources that we have to direct toward regulatory is shifting in a way that we can redeploy those other things that create avenues of growth. I would say quite constructive. These things take time, but it's happening in real time. Going back to where I started, I do think this improves our competitive position relative to others that are outside of the regulatory landscape.

Speaker #6: So I would say quite constructive. These things take time, but it's happening in real time. And I do you know going back to where I started, I do think this improves you know our competitive position you know relative to others.

Speaker #6: That are outside of the regulatory landscape.

Speaker #1: We'll take our next question from Erica Najarian with UBS.

Katie: We'll take our next question from Erica Najarian with UBS.

Speaker #7: Hi, thank you. Given the comments about the regulatory landscape, and focusing on growth and the opportunity to play offense, you clearly announced the collaboration with T.

[Analyst 3]: Hi, thank you. Given the comments about the regulatory landscape and focusing on growth and the opportunity to play offense, and clearly you announced the collaboration with T. Rowe Price and, you know, Industry Ventures. I'm just wondering, David, as you think about, you know, Goldman Sachs in the future, you know, One Goldman Sachs 3.0, you know, what are those opportunities for growth that you think maybe are missing or not scaled in the business right now that will really sort of maybe stabilize or enhance that sort of 15% ROE as we look forward, even without such a robust capital markets backdrop?

Speaker #7: Rowe, you know, in industry ventures. I'm just wondering, David, as you think about Goldman Sachs in the future, you know, One Goldman Sachs 3.0, what are those opportunities for growth that you think maybe are missing or not scaled in the business right now?

Speaker #7: That will really sort of maybe stabilize or enhance that sort of 15% ROE as we look forward, even without such a robust capital markets backdrop?

Speaker #5: Sure. So you know I think you know I think we've and I appreciate the question. I think we've talked about this a lot, Erica, but you know at the end of the day, you know our strategy remains the same.

Denis Coleman: Sure. I think we've, and I appreciate the question. I think we've talked about this a lot, Erica, but at the end of the day, our strategy remains the same. We continue to invest in global banking and markets and are very, very focused on share and wallet share. We believe through the cycle that is a mid-teens business. That doesn't mean there couldn't be a year or an environment where that business is different in a different capital markets environment. We believe consistently through the cycle, we now have that business operating as a mid-teens return business. We've been clear that Asset & Wealth Management remains a very, very attractive growth channel for the firm. You can see us improving margins and uplifting returns there, but there's still more to go.

Speaker #5: We continue to invest in global banking and markets and are very, very focused on share and wallet share. We believe that through the cycle, this is a mid-teens business. That doesn't mean there couldn't be a year or environment where that business is different in a different capital markets environment, but we believe consistently through the cycle we now have that business operating as a mid-teens return business.

Speaker #5: And we've been clear that asset and wealth management remains a very, very attractive growth channel for the firm. You can see us improving margins and uplifting returns there, but there's still more to go.

Speaker #5: And we are highly confident in our ability to uplift the returns and asset wealth management over the next couple of years. That obviously strengthens and enhances the overall return profile and durability of the firm.

Denis Coleman: We are highly confident in our ability to uplift the returns in Asset & Wealth Management over the next couple of years. That obviously strengthens and enhances the overall return profile and durability of the firm. We are executing against that. I think you can see through T. Rowe and also through our acquisition of Industry Ventures that this gives you an idea of how we're thinking about strategically accelerating that growth and strengthening that overall platform. We're going to do it thoughtfully. We're going to do it carefully. We're going to do it prudently. We're going to make investments that we think strengthen the platform and allow us to continue on that trajectory.

Speaker #5: We are executing against that. And I think you can see through T. Rowe and also through our acquisition of Industry Ventures that this gives you an idea of how we're thinking about strategically accelerating that growth and strengthening that overall platform.

Speaker #5: We're going to do it thoughtfully. We're going to do it carefully. We're going to do it prudently. But we're going to make investments that we think strengthen the platform and allow us to continue on that trajectory.

Speaker #5: So when you think about the firm, two big businesses, banking and markets, asset and wealth management, banking and markets, mid-teens through the cycle, and as we execute on asset and wealth management and continue to enhance the returns, that should produce a significantly higher return than it currently produces and we're confident on our ability to deliver that.

Denis Coleman: When you think about the firm, two big businesses, banking and markets, Asset & Wealth Management, banking and markets, mid-teens through the cycle, and as we execute on Asset & Wealth Management and continue to enhance the returns, that should produce a significantly higher return than it currently produces. We're confident on our ability to deliver that. That therefore gives you a more durable targeted return.

Speaker #5: That therefore gives you a more durable, targeted return.

Speaker #7: Thank you, David.

[Analyst 3]: Thank you, David.

Speaker #1: Thank you. We'll take our next question from Christian Blue with Autonomous Research.

Katie: Thank you. We'll take our next question from Christian Blau with Autonomous Research.

Speaker #6: Good morning, David and Denis. Just firstly on the equities business, I appreciate that we can't speak too much into one quarter. But I'm curious what drove, or what you think drove, the underperformance versus peers. I would also love to get some more color around, I guess, the decline in equity trading revenues. I believe you called out cash equity as a driver.

[Analyst 2]: Good morning, David and Denis. Just firstly, on the equities business, I appreciate that we can't read too much into one quarter, but curious what drove or what you think drove the underperformance versus peers. Also, we'd love to get some more color around, I guess, the decline in equities intermediation revenues. I believe you called out cash equity as a driver.

Speaker #4: Sure, Christian. So as you as you say at the beginning of your question, you know the overall strength of our of our equities platform remains you know an excellent condition.

[Company Representative]: Sure, Christian. As you say at the beginning of your question, the overall strength of our equities platform remains in excellent condition. We're having our best year-to-date performance ever for that business. The cash component of equities intermediation was softer. In the prior year period, that activity was up almost 30%. The prior quarter was a top decile quarter, so our comps were difficult. We had slightly less robust performance in the cash portion of the business. The rest of the franchise continues to perform extremely well across the derivative components of intermediation. The financing piece was a record. In aggregate, the franchise feels extremely well positioned. We're seeing high levels of client engagement and feel good about how it's set up for the forward.

Speaker #4: We're having our best year-to-date performance ever for that business. The cash component of equities intermediation was softer. In the prior year period, that activity was up almost 30%.

Speaker #4: In the prior quarter, we had a top decile performance. So, our comps were difficult. Additionally, we saw slightly less robust performance in the cash portion of the business.

Speaker #4: But the rest of the franchise continues to perform extremely well across the derivative components of intermediation. The financing piece was a record. And in aggregate, again, the franchise feels extremely well positioned.

Speaker #4: We're seeing high levels of client engagement and feel good about how it's set up for the forward.

Speaker #6: Okay, thank you. And then this one's a bit of a wonky question. So please bear with me. But just given all the jitters around you know things like first brands and tricolor, which apparently had I guess some fraud issues around collateral being pledged multiple times, can you talk about or at least remind us how you manage risk in your financing businesses, especially around collateral integrity?

[Analyst 2]: Okay. Thank you. This one's a bit of a wonky question, so please bear with me. Just given all the jitters around things like First Brands and Tricolor, which apparently had, I guess, some fraud issues around collateral being pledged multiple times, can you talk about or at least remind us how you manage risk in your financing businesses, especially around collateral integrity?

Speaker #4: Sure, Christian. And this will sound familiar to some of my colleagues from my previous remarks, but the process for us is, and the importance for us is, to make sure we have a consistent set of underwriting standards, that we have robust upfront due diligence, that we have ongoing monitoring and reporting, that we diligence underlying collateral, and that we manage the granularity of our portfolio within our own internally set diversification and concentration limits.

[Company Representative]: Sure, Christian. This will sound familiar to some of my previous remarks. The process for us is, and the importance for us is to make sure we have a consistent set of underwriting standards and that we have robust upfront due diligence, that we have ongoing monitoring and reporting, that we diligence underlying collateral, that we manage the granularity of our portfolio within our own internally set diversification and concentration limits, and that we have consistent standards for what we expect the risk return characteristics to be. Some of those idiosyncratic names that you give reference to, we didn't have direct exposure to those names. Part of the key to credit underwriting is to make sure that you miss some of the more challenged credits. That all comes down to upfront diligence and having a longstanding track record and an ability to be selective.

Speaker #4: And that we have, you know, consistent standards for what we expect the risk-return characteristics to be. You know, some of those idiosyncratic names that you give reference to, we didn't have direct exposure to those names.

Speaker #4: You know, part of the key to credit underwriting is to make sure that you miss some of the more challenged credits.

Speaker #4: And that all comes down to upfront diligence, having a longstanding track record, and the ability to be selective. We have a very big market presence here.

[Company Representative]: We have a very big market presence here. We see a lot of opportunities. There's a lot of demand from clients for us to support them. We have the ability to be selective with respect to where we extend our balance sheet, make sure it comports with our own standards of risk management.

Speaker #4: We see a lot of opportunities. There's a lot of demand from clients for us to support them. We have the ability to be selective with respect to where we extend our balance sheet, making sure it comports with our own standards of risk management.

Speaker #1: We'll take our next question from Betsy Gracic with Morgan Stanley.

Katie: We'll take our next question from Betsy Graseck with Morgan Stanley.

Speaker #8: Good Good morning. Hello, can

[Analyst 3]: Good morning.

Speaker #6: Good morning.

[Company Representative]: Good morning.

Speaker #8: you hear me? Hi. Okay, great. David, you mentioned earlier about okay, great. Thank you. David, you mentioned earlier about how prudent, careful, strategy execution, as we were discussing the as you were discussing the partnerships and acquisition that you announced the other day, it would be interesting to understand what you think the opportunity set is for you in the space in wealth and asset management from an acquisition perspective in the sense of is should we expect these you know kind of bite-sized overtime building up over time, or are there opportunities that you see that could potentially get you to a larger scale faster?

[Analyst 3]: Hello. Can you hear me? Hi. Okay, great. David, you mentioned earlier about how prudent, careful strategy execution as we were discussing the partnerships and acquisition that you announced the other day. It would be interesting to understand what you think the opportunity set is for you in the space in Wealth and Asset Management from an acquisition perspective in the sense of, should we expect these kind of bite-sized over time, building up over time, or are there opportunities that you see that could potentially get you to a larger scale faster?

Speaker #5: Yeah, I mean, first of all, Betsy, and I appreciate the question. And some of this will sound familiar to things I've said on other earnings calls when I say publicly you know in my public comments.

David Solomon: Yeah. I mean, first of all, Betsy, I appreciate the question. Some of this will sound familiar to things I've said on other earnings calls and I say publicly, you know, in my public comments. We're obviously focused on accelerating the Asset & Wealth Management business. Our Wealth Management business is an ultra-high net worth franchise, and I would say it is scaled. We don't, you know, unlike other, you know, peers, we are not looking, you know, to directly control client relationships in the broad high net worth space or in other broad wealth channels. That's not really our strategy. Our strategy is to continue to grow and be the leading ultra-high net worth, high-touch wealth platform and to have it married with our extraordinary, you know, manufacturing capability and product offering in our Asset Management business.

Speaker #5: We’re obviously focused on accelerating the asset and wealth management business. Our wealth management business is an ultra-high-net-worth franchise, and I would say it is scaled.

Speaker #5: And we don't, you know, unlike other, you know, peers, we are not looking, you know, to directly control client relationships in the broad high net worth space or in other broad wealth channels.

Speaker #5: That's not really our strategy. Our strategy is to continue to grow and be the leading ultra-high net worth, high touch wealth platform and to have it married with our extraordinary you know manufacturing capability and product offering in our asset management in our asset management business.

Speaker #5: And the acquisition that you saw today, of industry ventures, you know adds to that. It's giving our very, very wealthy clients access to other investment opportunities and products that are you know hard to access in different channels.

David Solomon: The acquisition that you saw today of Industry Ventures, you know, adds to that. It's giving our very, very wealthy clients access to other investment opportunities and products that are, you know, hard to access in different channels. We feel very good that that's very, you know, on strategy. Are there larger acquisitions that could enhance, you know, our wealth platform? Absolutely. Things I've said before, the bar to do more significant things is always going to be very high. I've also said when you look at the best companies or the best businesses around Asset & Wealth Management, they're generally sold, not bought. Most of the best ones are not for sale and not, you know, not available. If we saw something that could accelerate our journey in Asset & Wealth Management, we'd certainly consider it, but always with a very, very high bar.

Speaker #5: And so you know, we feel very good that that's very, you know, on strategy. Are there larger acquisitions that could enhance, you know, our wealth platform?

Speaker #5: Absolutely. But the things I've said before, the bar to do more significant things is always going to be very high. And I've also said that when you look at the best companies and the best businesses around asset and wealth management, they're generally sold, not bought.

Speaker #5: And most of the best ones are not for sale and, you know, not available. But if we saw something that could accelerate our journey in asset and wealth management, we'd certainly consider it, but always with a very, very high bar.

Speaker #5: At the moment, what we're seeing is interesting things that enhance our distribution and enhance our ability to offer very, very unique you know products to our client base already and will continue to you know capture through third-party wealth channels you know opportunities to use our manufacturing capability and asset management more broadly.

David Solomon: At the moment, what we're seeing is interesting things that enhance our distribution, enhance our ability to offer very, very unique, you know, products to our client base already, and we'll continue to, you know, capture through third-party wealth channels, you know, opportunities to use our manufacturing capability and Asset Management more broadly.

Speaker #1: Okay, thank you. And then just separately, should we still be anticipating an exit from the Apple Card at some point in the near or medium term?

[Analyst 3]: Thank you. Just separately, should we still be anticipating an exit from the Apple Card at some point in the near or medium term, or is that no longer expected? Thank you.

Speaker #1: Or is that no longer expected? Thank you. You know.

Speaker #5: So we've been clear that credit cards are not a go-forward focus for Goldman Sachs. I don't have anything more to say on the Apple Card program at the moment.

David Solomon: We have been clear that credit cards are not a go-forward focus for Goldman Sachs. I do not have anything more to say on the Apple Card program at the moment. You saw us completely, and we now are completely exited from the General Motors card platform. When there is something more for me to report on the Apple Card, I guarantee that this broad group that is on the call will be among the first to know it.

Speaker #5: You saw us completely and we now are completely exited from the GM card platform. When there's something more for for me to report on the Apple card, you know I guarantee that this broad group that's on the call will be among the first to know it.

Speaker #1: Thank you. We'll take our next question from Mike Mayo with Wells Fargo Securities.

Katie: Thank you. We'll take our next question from Mike Mayo with Wells Fargo Securities.

Speaker #9: Hi. In what role do you see, on the negative side, Goldman Sachs 3.0? I would think platform solutions might not make the cut. And I guess that relates to the Apple Card. I'm just wondering why you're the leading dealmaker in the world and that's still hanging around.

[Analyst 1]: Hi. In what role does, you know, on the negative side, One Goldman Sachs 3.0, I would think Platform Solutions might not make the cut? I guess that relates to the Apple Card. I'm just wondering why you're the leading dealmaker in the world and that's still hanging around. I guess that's a follow-up. On the positive side, you said the quarter-end backlog is at the highest level in three years. Can you give us a sense of that mix? Also, if I heard you correctly, you said, I might have heard this incorrectly, 40% of your FICC and equity trading is financing. If I got that wrong, if you could correct me in what's comprising that. Thank you.

Speaker #9: I guess that's a follow-up. But on the positive side, you said the quarter-end backlog is at the highest level in three years. Can you give us a sense of that mix?

Speaker #9: And also, if I heard you correctly, you said I might have heard this incorrectly: 40% of your pick in equity trading is financing. If I got that wrong, please correct me and explain what comprises that.

Speaker #9: Thank you.

Speaker #4: Sure. So you heard correctly. Our backlog is at the highest level in three years. You know that backlog that we report comprises advisory, equity underwriting, and debt underwriting.

Denis Coleman: Sure. You heard correctly, our backlog is the highest level in three years. That backlog that we report comprises the Advisory, equity underwriting, and debt underwriting components in aggregate. We made a point that it actually stands at that position, notwithstanding very high levels of accruals over the course of the previous quarter. It gives you a sense for our optimism on the outlook and our expectation for other types of activity that are to come through our franchise broadly. You're also correct in your understanding of the contribution of FICC financing and equities financing as a combined component of the FICC and equity lines combined. We continue to focus on growing those durable and predictable financing revenue streams and are just reporting out on the sort of marginal contribution that they represent within the overall FICC and equities business.

Speaker #4: Components in aggregate. We made a point that it actually stands at that position, notwithstanding very high levels of accruals over the course of the previous quarter.

Speaker #4: And it gives you a sense of our optimism on the outlook and our expectation for other types of activity that are to come through our franchise broadly.

Speaker #4: You're also correct in your understanding of the contribution of FIC financing and equities financing as a combined component of the FIC and equity lines combined.

Speaker #4: So we continue to focus on growing those durable and predictable financing revenue streams, and we're just reporting out on the sort of marginal contribution that they represent within the overall FIC and equities business.

Speaker #3: And as far as that 40%, that's up, I think, from 33% quarter over quarter. I'm just wondering, what were the sources of that incremental growth?

[Analyst 1]: As far as that 40%, that's up, I think, from 33% quarter over quarter. I'm just wondering what were the sources of that incremental growth.

Speaker #4: This has been an activity that we have been steadily growing over the last couple of years as we think about the durable revenue profile of the firm.

Denis Coleman: This has been an activity that we have been steadily growing over the last couple of years. As we think about the durable revenue profile of the firm, those components of global banking and markets, together with, you know, management and other fees, private banking and lending, and asset & wealth management, those are the areas of the firm that we've been consistently deploying resources against and been focused on. That has been steadily growing. I don't think there's a new step function change in that contribution. It's been a constant commitment. It's been steadily growing the last couple of years.

Speaker #4: Those components of global banking and markets, together with management and other fees, private banking and lending, and asset and wealth management, those are the areas of the firm that we've been consistently deploying resources against and been focused on.

Speaker #4: That has been steadily growing. So I don't think that's a I don't think there's a new step function change in that contribution. It's been a constant commitment.

Speaker #4: It's been steadily growing in the last couple of years.

Speaker #1: We'll take our next question from Brennan Hawken with Bank of Montreal.

Katie: We'll take our next question from Brennan Hawken with Bank of Montreal.

Speaker #6: Good morning. Thanks for taking my question. I was curious about an AWM. So, if we adjust for the impact of HPI, pre-tax margins, are you sort of roughly at the mid-20s? And you're roughly at your mid-20s target, excuse me, on a core basis.

[Analyst 1]: Good morning. Thanks for taking my question. I was curious about Asset & Wealth Management. If we just, for the impact of HPI, pre-tax margins are roughly at the mid-20s and the roughly mid-20s target, excuse me, on a core basis. If we think about what's going to drive you to that mid-teens ROE, is it more around the capital side, or do you still have continued room on the profitability front to have that ROE higher?

Speaker #6: So if we think about what's going to drive you to that mid-teens ROE, is it more around the capital side, or do you still have continued room on the profitability front that can drive that ROE higher?

Speaker #5: I think I think Brennan, on a high level, you know just to boil this down, and we've been pretty consistent on this. We continue to fundraise and we continue to grow the scale of the platform.

David Solomon: I think, Brennan, on a high level, just to boil this down, and we've been pretty consistent on this, we continue to fundraise and we continue to grow the scale of the platform. As that fundraising goes on, that adds to the management fee, and the marginal margin as you scale the business continues to improve significantly. We are very confident as we continue to fundraise and scale the platform that there's more room on the margin side. As we continue to shift our strategy and finish with the HPI portfolio, that will free up a little bit of capital. At this point, most of the margin and return improvement is coming from the continued growth and scaling of the platform. Perfect.

Speaker #5: As that fundraising goes on, that adds to the management costs, and you know the marginal margins as you scale the business continue to improve significantly.

Speaker #5: So we are very confident as we continue to fundraise and scale the platform that there's more room on the margin side as we continue to shift our strategy and you know finish on the finish with the HPI portfolio You know that will free up a little bit of capital.

Speaker #5: But at this point, most of the margin and return improvement is coming from the continued growth and scaling of the platform.

Speaker #6: Perfect.

Speaker #1: Thanks for that call, David. And, and on the expense side, you, you, you were clear in your expectations on, on the comp ratio, but, curious what non-comp, we saw a charitable contribution this quarter, which is normally, I believe, in the in the fourth quarter instead.

Operator: Thanks for that color, David. On the expense side, you were clear in your expectations on the comp ratio. Curious about non-comp. We saw a charitable contribution this quarter, which is normally, I believe, in the fourth quarter instead. Was that just a timing change, or is there going to be contributions in just the back half going forward, like third and fourth quarter? What's the right way to think about a jumping-off point for non-comp?

Speaker #1: So, was that just a timing change, or is there going to be contributions in just the back half going forward, like third and fourth quarter?

Speaker #1: And, and what's the right way to think about it? Jumping off point for non-comp?

Speaker #2: So, I appreciate the comment on non-comp. We continue to have all the same programming and discipline around managing overall non-comp growth.

Katie: I appreciate the comment on non-comp. We continue to have all the same programming and discipline around managing overall non-comp growth. The biggest driver for us, again, was transaction-based expenses. That's obviously correlated with the elevated levels of activity we're seeing across the board. We did call out the charitable expenses. You are correct in your recollection that, traditionally, we did recognize most of those expenses in the fourth quarter. This year, we're making an effort to actually spread it out over the course of the year, so it won't be showing up only in the third quarter.

Speaker #2: The biggest driver for us, again, was transaction-based expenses. That's obviously correlated with the elevated levels of activity we're seeing across the board.

Speaker #2: We did call out the charitable expenses. You are correct in your recollection that, traditionally, we did recognize most of those expenses in the fourth quarter. This year, we're making an effort to actually spread them out over the course of the year.

Speaker #2: So, it won't be showing up only in the third quarter.

Speaker #3: Thank you. I'll take our next question from Dan Fannin with Jefferies.

David Solomon: Thank you. We'll take our next question from Dan Fannin with Jefferies.

Speaker #4: Thanks. Good morning. You've exceeded or met most of the, if not all of your targets in asset and wealth management, except the kind of $1 billion of incentive fees.

Operator: Thanks. Good morning. You've exceeded or met most of the, or if not all, of your targets in Asset & Wealth Management except the kind of billion dollars of incentive fees. You're tracking below that this year. Just curious as to when you think your ability to hit that is.

Speaker #4: You know, you're tracking below that this year. Just curious as to when you think your ability to hit that is.

Speaker #2: So, our fair point, Dan, and that, and, and your question actually also helps, you know, answer the question on how asset and wealth management migrates towards a higher return profile over time, because it's another one of the contributors to top line that also has, you know, significant marginal margin contribution.

Katie: Sure. Fair point, Dan. Your question actually also helps answer the question on how Asset & Wealth Management sort of migrates towards a higher return profile over time because it's another one of the contributors to top line that also has significant marginal margin contribution. You're right to ask because the unrealized balance of incentive fees as of the last quarter is now at $4.6 billion. We still do have a visibility and expectation that there's a significant amount of incentive fees that will pull through the P&L over the next several years. Ultimately, it's going to be a function of the way in which certain of those vehicles are able to finally monetize their investments and return carry to their investors, enable us to recognize the incentives.

Speaker #2: And you're right to ask because the unrealized balance of incentive fees as of the last quarter is now at $4.6 billion.

Speaker #2: So, we still have visibility and expectations that there are significant amounts of incentive fees that will pull through the P&L over the next several years.

Speaker #2: Ultimately, it's going to be a function of the way in which certain of those vehicles are able to, you know, finally monetize their investments and return carried interest to their investors and enable us to recognize the incentives.

Speaker #2: But, you know, the overall environment—the deal-making environment, the monetization environment, the proportion of sponsor activity in the world—all of that is trending in the right direction. That should help propel us closer to our medium-term targets of $1 billion in incentive fees per year.

Katie: The overall environment, deal-making environment, monetization environment, proportion of sponsor activity in the world, all of that is trending in the right direction. That should help propel us closer to our medium-term targets of $1 billion of incentive fees per year.

Speaker #4: Great. That’s helpful. And then I wanted to follow up on the old business, given the strength in fundraising. You know, you raised the guidance after several years of strong growth.

Operator: Great, that's helpful. I wanted to follow up on the old business given the strength in fundraising. You raised the guidance after several years of strong growth. Can you talk about the funds that are coming in, either bigger or more funds coming to market? Anything specific you could point to that's driving some of that excess growth?

Speaker #4: Can you talk about the funds that are coming in, either bigger or, you know, the more funds coming to market? Anything specific you could point to that's driving some of that excess growth?

Speaker #2: Sure. So, you know, obviously the last five years we've been raising about $65 billion a year, which was a healthy clip.

Katie: Sure. Obviously, the last five years, we've been raising about $65 billion a year, which was a healthy clip. Our expectations now for this year are a step function higher, approximately $100 billion. The contribution is broad-based, so it's across multiple different asset types. It is a combination of having certain vehicles that are larger than previous vintages as well as launching new types of fundraising vehicles. It's a pretty broad-based contribution across the board.

Speaker #2: Our expectations now for this year are step function higher, you know, approximately $100 billion. But the contribution is broad-based, so it's across multiple different asset types.

Speaker #2: And it is a, it's a combination of having, certain vehicles that are larger than, than previous vintages, as well as launching, you know, new types of fundraising vehicles.

Speaker #2: So, it's pretty broad-based, with contributions across the board.

Speaker #3: We'll take our next question from Devin Ryan with Citizens.

David Solomon: We'll take our next question from Devin Ryan with Citizens.

Speaker #4: great. Good morning.

Speaker #5: David Dennis. First question just on the financial advisory strength. Obviously, really nice on an absolute basis, and then relative to peers as well. And all the data we look at would suggest we're still pretty early in the recovery for that business.

Operator: Great. Good morning, David. Denis. First question just on the financial advisory strength. Obviously, really nice on an absolute basis and then relative to peers as well. All the data we look at would suggest we're still pretty early in the recovery for that business. Sponsors are just starting to reengage. I know you touched on the market share gains as well. Just be good to get some additional context on where you feel like we are in the broader recovery for the advisory business, for the industry right now, you know, how far away we are from the baseline. Just from a market share perspective, is that Senior Banker headcount up a lot, or is that just one Goldman Sachs resonating?

Speaker #5: Sponsors are just, starting to re-engage and, and then I, I know you talked on, touched on the market share gains as well. Just be good to get some additional context on where you feel like we are in the broader recovery for the advisory business, for the industry right now.

Speaker #5: you know, how far away we are from the baseline. And then just from a market share perspective, is that senior bank or headcount up a lot, or is that just one Goldman Sachs resonating?

Speaker #2: So a couple of aspects to it, Devin. I appreciate the question. First, on the cycle, you know, we've been talking about an improvement in M&A all year because one of the things we see inside the firm is that we've got really great transparency as to all the transactions that are in progress.

Denis Coleman: A couple of aspects to it, Devin. I appreciate the question. First, on the cycle, we've been talking about an improvement in M&A all year because one of the things we see inside the firm is we've got really great transparency inside the firm as to all the transactions that are in progress, and kind of what CEOs are doing and thinking. In my prepared remarks, if you remember, I said after a little bit of volatility early in the year, CEOs are really focused on strategically where they want to go. I think one of the things to frame is that we're in an environment at the moment where CEOs think that the opportunity to get things done strategically is now possible after being in a period of time where they felt it was not possible. That's turning them all to focusing strategically.

Speaker #2: And, kind of what CEOs are doing and thinking. In my prepared remarks, if you remember, I said, you know, after a little bit of volatility early in the year, CEOs are really focused on strategically where they want to go.

Speaker #2: You know, I think, you know, I think one of the things to frame is that we're in an environment at the moment where CEOs think that, you know, the opportunity to get things done strategically is now possible after being in a period of time where they felt it was not possible.

Speaker #2: And so that's turning them all to focusing strategically. We have significant activity in the shop. You saw the comments around our backlog. That kind of shows you the sustainability.

Denis Coleman: We have significant activity in the shop. You saw the comments around our backlog. That kind of shows you the sustainability. I think that we are going to see a very constructive M&A environment through the end of the year into 2026. I'd expect 2026 to be a stronger M&A environment unless there's some macro disruption. I think there's been a meaningful improvement in where we are in the cycle. I still think given market cap expansion growth, the fact that we were underpenetrated in terms of activity because of the regulatory environment for the last four years, I expect a pretty healthy environment. We commented on sponsors. The sponsor activity is up 40%. We see more of that in the pipeline. I think you are going to see an acceleration there. I think it's quite constructive, quite constructive.

Speaker #2: You know, I, I, I think that we are going to see a very constructive M&A environment through the end of the year into 2026, and I'd expect 2026 to be a stronger M&A environment unless there's some macro disruption.

Speaker #2: So I think there's been a meaningful improvement in where we are in the cycle. But I still think, given market cap expansion and growth, as well as the fact that we were under-penetrated in terms of activity because of the regulatory environment for the last four years, I expect a pretty healthy environment.

Speaker #2: We commented on sponsors. You know, sponsor activity is up kind of 40%. We see more of that in the pipeline. And so I think you're going to see an acceleration there.

Speaker #2: So I think it's quite constructive, quite constructive.

Speaker #4: That's great. Okay, I just want to come back to the prime services and financing as well. I know it's been steady growth, as Denis mentioned, but I suspect there's also a bit of a cyclical component there, just tied to higher-risk appetites. And then there's, obviously, the secular and kind of Goldman Sachs market share story.

Operator: That's great. Okay. I just want to come back to the prime services and financing as well. I know it's been steady growth, as Denis mentioned. I suspect there's also a bit of a cyclical component there just tied to higher risk appetites. There's obviously the secular and kind of Goldman Sachs market share story. With where we are with record valuations across a number of assets, is there a way to frame how you're thinking about the cyclical demand in that business right now? Significantly elevated. From a secular growth story, just talk about how much more room there is over the next handful of years here. Thanks.

Speaker #4: So, just with where we are with, you know, record valuations across a number of assets, is there a way to frame how you’re thinking about the cyclical demand in that business right now?

Speaker #4: Significantly elevated. And then, just from a secular growth story, talk about how much more room there is over the next handful of years here.

Speaker #4: Thanks.

Speaker #2: Sure. So you're right. This business definitely benefits from the underlying environment. Balances are very, very correlated with overall levels in the markets.

Katie: Sure. You're right. This business definitely benefits from the underlying environment. Balances are very, very correlated with overall levels in the markets. That is an attractive feature of the business, but there's obviously the composition of the portfolio and the nature of the activities and the flows that go into it. You can calibrate more or less growth relative to the underlying backdrop based on how you manage your portfolio of credit extension. It has been, together with fixed financing, a good source of stable revenues for us across the franchise. It's a product that is highly valued by our clients. There's a lot of demand for us to provide more by way of prime brokerage services to our clients, and it's something that we're very strategically focused on continuing to provide to meet with clients' demand.

Speaker #2: that is a, you know, attractive feature of the business. but there's obviously the composition of the portfolio and the nature of the activities and the flows, that go into it.

Speaker #2: So, you can, you can, you can calibrate, you know, more or less growth relative to the underlying backdrop based on how you manage your portfolio of credit extension.

Speaker #2: It has been, together with fixed financing, a good source of stable revenues for us across the franchise. It's a product that is highly valued by our clients.

Speaker #2: there's a lot of demand for us to provide more by way of prime brokerage services to our clients. and so it's, it's something that we're very strategically focused on continuing, to provide, to meet with, you know, clients' demand.

Speaker #3: Thank you. We'll take our next question from Gerard Cassidy with RBC.

David Solomon: Thank you. We'll take our next question from Gerard Cassidy with RBC.

Speaker #6: Good morning, Denis. Good morning, David. On the comments you made, David, on Goldman Sachs 3.0, which obviously is very positive, how do you direct or where should you direct us, and how do we measure that success over the next three to five years as you roll this out throughout the organization?

[Analyst 1]: Good morning, Denis. Good morning, David. On the comments you made, David, on One Goldman Sachs 3.0, which obviously is very positive, as outsiders, how do you direct or where should you direct us how we measure that success over the next three to five years as you roll this out throughout the organization? Is it going to be primarily through the ROTCE number, or is there something else we should focus on?

Speaker #6: Is it going to be primarily through the ROTCE number, or is there something else we should focus on?

Speaker #2: So, so Gerard, I, I appreciate the question. You know, and, in, in my prepared remarks, when I laid it out, I said to you that, you know, in the first quarter we'll give you a further update on this.

Denis Coleman: Gerard, I appreciate the question. In my prepared remarks, when I laid it out, I said to you that in the first quarter, we'll give you a further update on this. If you go back and you think about the way we've operated in the past, we give you information. We then hold ourselves accountable to that. Part of the reason that we made this announcement today is to do these kinds of things in an organization like Goldman Sachs, we have to bring the organization along. We have to create a roadmap for the organization. When we're in a position that we can give you more concrete metrics that you can track and we can quantify and proportionalize, we have good ideas on those things now, really good ideas on those things. We're not prepared to lay that all out specifically for you.

Speaker #2: You know, if you, if you go back and you think about the way we've operated in the past, we, we, we give you information.

Speaker #2: We then hold ourselves accountable to that. Part of the reason that we made this announcement today is to do these kinds of things in an organization like Goldman Sachs.

Speaker #2: We have to bring the organization along, and we have to create a roadmap for the organization when we're in a position that we can give you more concrete metrics that you can track, and we can quantify and proportionalize.

Speaker #2: We have good ideas on those things now, really good ideas. On those things, we're not prepared to lay that all out specifically for you.

Speaker #2: But I promise you that as we go into the first quarter and the second quarter, you'll have more transparency on what we're doing.

Denis Coleman: I promise you that as we go into the first quarter and the second quarter, you'll have more transparency on what we're doing, the opportunity, how to think about it, and how it drives further earnings growth for the firm.

Speaker #2: The opportunity, how to think about it, and how it drives further earnings growth for the firm.

Speaker #4: Very good, thank you. And then as a follow-up, obviously you guys have been very well capitalized with the CET1 ratio just over 14%. The requirement is 10.9%. You've been very active in returning that excess capital through share repurchases.

[Analyst 1]: Very good. Thank you. Then as a follow-up, obviously, you guys are very well capitalized with a CET1 ratio just over 14%. The requirement, 10.9%. You've been very active in returning that excess capital through share repurchases. As we go forward, assuming the regulatory environment continues to move in the direction that you referenced, David, where should we see the buffer? I mean, if you come in with a final number, maybe in a year or two, something closer to 10.5%, the regulatory requirement, what kind of buffer do you guys like to operate above your regulatory requirement when it comes to CET1?

Speaker #4: As we go forward, assuming the regulatory environment continues to move in the direction that you've referenced, David, where should we see the buffer? I mean, if you come in with a final number, maybe in a year or two, something close to the 10 and a half percent man regula, you know, the regulatory requirement, what kind of buffer do you guys like to operate above your regulatory requirement when it comes to CET1?

Speaker #2: So, I think the way to think about a buffer is, you know, it depends on the clarity you have in the capital regime.

Denis Coleman: I think the way to think about a buffer is, you know, it depends on the clarity you have in the capital regime. I think that there is a reasonable chance or a good chance that after operating a period of time where there was a lot of capital volatility and firms had a hard time planning their capital on a year-to-year basis, there's a good chance we're going to be in a regime where we have more clarity on our capital for a multi-year period of time, certainly within a tighter range. That would lead to narrower buffers than what we and others on the street have been running with over the course of the last five years when there's been more capital volatility.

Speaker #2: I think there is a reasonable chance, or a good chance, that after operating for a period of time where there was a lot of capital volatility and firms had a hard time planning their capital on a year-to-year basis, there's a good chance we're going to be in a regime where we have more clarity on our capital for a multi-year period of time, certainly within a tighter range.

Speaker #2: That would lead to narrower buffers than what we and others on the street have been running with over the course, you know, of the last five years when there's been more capital volatility.

Speaker #2: If you go back and look over the last few years, most of the institutions have been running larger buffers because there was more capital volatility through the C-Corp process.

Denis Coleman: If you go back and you look over the last few years, most of the institutions have been running larger buffers because there was more capital volatility through the CCAR process. You have more transparency around that process. Also, because you put in something like averaging, that means that there's going to be less volatility on a year-to-year basis. I think most firms, including ourselves, would be comfortable running with buffers that are less than the buffers you've seen on average over the last few years. As we have more clarity in that, as I said earlier, I think the direction of travel is quite positive. We'll give you more of a sense of how we think about the buffers. That's a big macro way to think about it. This is another thing that's actually quite constructive for Goldman Sachs and for others in the industry.

Speaker #2: You have more transparency around that process, and also because you put in something like averaging, that means that there's going to be less volatility on a year-to-year basis.

Speaker #2: I think most firms, including ourselves would be comfortable running with buffers that are less than the buffers you've seen, you know, on average over the last few years.

Speaker #2: But as we have more clarity in that, as I said earlier, I think the direction of travel is quite positive. We'll give you more of a sense of how we think about the buffers.

Speaker #2: But that's a big macro way to think about it. And this is another thing that's actually quite constructive for Goldman Sachs and for others in the industry.

Speaker #3: Thank you. At this time, there are no further questions. Ladies and gentlemen, this concludes the Goldman Sachs third quarter 2025 earnings conference call. Thank you for your participation.

David Solomon: Thank you. At this time, there are no further questions. Ladies and gentlemen, this concludes the Goldman Sachs third quarter 2025 earnings conference call. Thank you for your participation. You may now disconnect.