GOLDMAN SACHS GROUP INC Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Strategic Update: Goldman Sachs aims to be the world's most exceptional financial institution with values of client service, partnership, integrity, and excellence. Global Banking & Markets is core with leadership in M&A, equities; Asset & Wealth Management has $3.1T assets under supervision. Focus on people, culture, and strategic initiatives like closing GreenSky sale, GM credit card transition.
• Financial Results: Fourth quarter revenues were $13.9 billion, EPS $11.95, ROE 14.6%; full year revenues $53.5 billion, EPS $40.54, ROE 12.7%.
• Efficiency Initiatives: Implemented a three-year program to manage expenses, optimize organizational footprint, spend management, and leverage AI for productivity.

Segment Performance

• Global Banking & Markets: In 2024, generated revenues of $35 billion, up 16% year-over-year. In the fourth quarter, Investment banking fees were $2.1 billion (up 24% YoY), FICC net revenues were $2.7 billion (up 35% YoY), and Equities net revenues were $3.5 billion. For the full year, total equities net revenues were a record $13.4 billion. FICC and Equities financing revenues grew 17% in 2024 to a record $9.1 billion.
• Asset & Wealth Management: 2024 revenues were $16.1 billion, up 16% year-over-year. In the fourth quarter, management and other fees were a record $2.8 billion (up 8% QoQ, 15% YoY), and private banking and lending revenues were $736 million (up 11% YoY). Total assets under supervision ended the quarter at a record $3.1 trillion, driven by $70 billion liquidity products net inflows and $22 billion long-term fee based net inflows.

Guidance

• Expect further pickup in M&A and IPO activity in 2025.
• Asset & Wealth Management expects high-single digit annual growth in management and other fees.
• Platform Solutions drag on ROE to improve in 2025 and 2026.
• Expect a tax rate of approximately 20% in 2025.

Risks

• Regulatory uncertainty, including Fed stress testing and potential changes.
• Geopolitical risks and market sentiment shifts.
• Cyber risk.

Question and Answer

Q: Follow-up on regulations, specifically the industry suit against the Fed A: David Solomon talks about regulatory uncertainty, noting the industry's concern over lack of transparency in Fed stress testing and the suit filed to protect rights, expressing hope for more transparent regulatory process Q: On capital markets activity, specifically M&A and IPO outlook A: David Solomon expects a pickup in M&A and IPO activity in 2025, citing increased CEO confidence and sponsor inquiry Q: On Platform Solutions and financing growth, including credit risk A: Denis Coleman talks about the Capital Solutions Group enabling growth in financing capabilities, emphasizing risk management and the opportunity to grow the financing business in a risk-adjusted manner