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Goldman Sachs is a leading global financial institution that operates through three main business segments, providing a wide range of financial services and products . The company engages in strategic advisory, asset management, and consumer banking, catering to both institutional and individual clients . Its offerings include investment products, wealth management solutions, and consumer banking services, with a significant focus on facilitating client transactions and market-making activities .
- Global Banking & Markets - Provides strategic advisory services, including mergers and acquisitions, divestitures, and restructurings, while facilitating client transactions and making markets in fixed income, equity, currency, and commodity products .
- Asset & Wealth Management - Manages assets and offers investment products across major asset classes, providing investing and wealth advisory solutions, financial planning, and brokerage transactions, while also issuing loans and accepting deposits through Marcus by Goldman Sachs .
- Platform Solutions - Focuses on consumer platforms and transaction banking, offering services like deposit-taking, payment solutions, credit card issuance through partnerships, and seller financing loans to small- and medium-sized retailers .
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Given the ongoing regulatory uncertainty around Basel III proposals and potential impacts from upcoming elections, can you elaborate on why you believe a 90 basis point capital buffer is appropriate and how you plan to navigate potential changes in capital requirements?
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With the sale of the GM credit card business not expected to close until Q3 2025 and continued operating losses of $50–$60 million per quarter until then, how will you address the ongoing drag on earnings, and are there any additional financial obligations or impacts we should anticipate post-closing?
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While you've made progress in expanding lending within your Private Banking and Wealth Management segments, how will you sustain this growth amid competitive pressures, and what investments are you making to ensure your adviser base can support long-term expansion?
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Your stock is trading at 1.6 times book value, reflecting market expectations for mid-teens ROE, yet current returns are around 12–13%; what concrete steps are you taking to consistently achieve mid-teens returns, and what are the main challenges you foresee in reaching this target?
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In the trading business, with market share having peaked in 2022 and signs of increasing competition, how do you plan to maintain or grow your market share, and are specific competitors making significant inroads into your core areas?
Competitors mentioned in the company's latest 10K filing.
- Brokers and dealers
- Investment banking firms
- Commercial banks
- Credit card issuers
- Insurance companies
- Investment advisers
- Mutual funds
- Hedge funds
- Private equity funds
- Merchant banks
- Consumer finance companies
- Financial technology and other internet-based companies
- Smaller institutions offering targeted services, such as independent advisory firms
Recent developments and announcements about GS.
Financial Reporting
- Q4 2024 Results: Net revenues of $13.9 billion, earnings per share (EPS) of $11.95, return on equity (ROE) of 14.6%, and return on tangible equity (RoTE) of 15.5%.
- Full-Year 2024 Results: Revenues increased by 16% year-over-year to $53.5 billion, EPS grew by 77% to $40.54, and ROE improved by over 500 basis points to 12.7%.
- Segment Highlights:
- Global Banking & Markets: Revenues of $35 billion for the year, up 16%. Investment banking fees rose 24% year-over-year in Q4, with strong performance in advisory and equity underwriting.
- Asset & Wealth Management (AWM): Revenues of $16.1 billion for 2024, up 16% year-over-year. Management and other fees reached a record $10 billion, surpassing the 2024 target.
- Alternatives: Assets under supervision totaled $336 billion, with $72 billion in gross third-party fundraising for the year.
- 2025 Outlook:
- Optimism for increased M&A and IPO activity, supported by a more favorable regulatory environment and renewed CEO confidence.
- Continued growth in AWM management fees, with expectations of high single-digit annual growth over the next several years.
- Targeting $1 billion in annual incentive fees in AWM, with progress expected in 2025.
- Capital Solutions Group: A new initiative to centralize financing, origination, and structuring capabilities, aimed at capturing growth in both public and private markets.
- Efficiency Measures:
- Focus on automation, AI, and spend management to improve operating leverage and client experience.
- Targeting a compensation ratio of 32% and an effective tax rate of approximately 20% for 2025.
- Market Sentiment: Analysts noted a positive shift in market conditions, with expectations for a more robust capital markets environment in 2025.
- Risks: Management highlighted potential risks, including geopolitical uncertainties, policy shifts, and market sentiment changes.
- Platform Solutions: The Apple partnership remains a key focus, with the card business expected to improve profitability in 2025 and 2026.
- AI and Technology: Goldman Sachs is leveraging AI to drive productivity and operational efficiency, though specific financial impacts are not yet quantifiable.
- AWM Lending Penetration: Analysts inquired about the underpenetration of lending within the wealth management business, with management noting progress and significant room for growth.
- Alternatives Deployment: Questions were raised about the pace of deploying raised capital in alternatives and the timeline for realizing performance fees.
- Capital Markets Share: Analysts discussed Goldman Sachs' leading market share in M&A and its positioning to capture growth in sponsor activity.
- Net Revenues: $53.51 billion, a 16% increase compared to 2023, driven by higher revenues in Global Banking & Markets and Asset & Wealth Management.
- Net Earnings: $14.28 billion, a 68% increase year-over-year.
- Diluted EPS: $40.54, up 77% from $22.87 in 2023.
- Return on Equity (ROE): 12.7%, and Return on Tangible Equity (ROTE): 13.5%.
- Book Value Per Share: $336.77, reflecting a 7.4% growth during the year.
- Assets Under Supervision (AUS): Reached a record $3.14 trillion, a 12% increase year-over-year.
- Net Revenues: $13.87 billion, a 23% increase compared to Q4 2023 and a 9% increase from Q3 2024.
- Net Earnings: $4.11 billion, up 105% year-over-year.
- Diluted EPS: $11.95, a 118% increase compared to Q4 2023.
- ROE: 14.6%, and ROTE: 15.5% for the quarter.
- Full Year Revenues: $34.94 billion, a 16% increase year-over-year.
- Investment Banking Fees: $7.73 billion, up 24%, driven by strong performance in debt and equity underwriting.
- FICC (Fixed Income, Currency, and Commodities): $13.20 billion, up 9%, with significant growth in financing revenues.
- Equities: $13.43 billion, up 16%, reflecting higher revenues in intermediation and financing.
- Q4 Revenues: $8.48 billion, a 33% increase year-over-year.
- Full Year Revenues: $16.14 billion, a 16% increase year-over-year.
- Record Management and Other Fees: $10.43 billion, up 10%.
- Private Banking and Lending Revenues: $2.88 billion, up 12%.
- Q4 Revenues: $4.72 billion, up 8% year-over-year and 26% quarter-over-quarter.
- Full Year Revenues: $2.43 billion, a 2% increase year-over-year.
- Q4 Revenues: $669 million, up 16% year-over-year.
- Full Year Operating Expenses: $33.77 billion, a 2% decrease compared to 2023, reflecting lower impairments and special expenses.
- Efficiency Ratio: Improved to 63.1% from 74.6% in 2023.
- Capital Returned to Shareholders: $11.80 billion in 2024, including $8.00 billion in share repurchases and $3.80 billion in dividends.
- Quarterly Dividend: Declared at $3.00 per share, payable on March 28, 2025.
- Durable Revenue Growth: Approximately 70% of 2024 revenues were derived from more stable and durable sources, such as management fees and financing revenues.
- Record Achievements: The firm achieved record revenues in Equities financing, FICC financing, and Management and other fees.
- Strategic Execution: Goldman Sachs continued to focus on scaling its Asset & Wealth Management business and narrowing its strategic focus in Platform Solutions.
Earnings Call
Goldman Sachs (GS) has released its fourth-quarter 2024 earnings call transcript, providing key insights into its financial performance, forward guidance, and strategic initiatives. Below is a summary of the main points:
Financial Performance
Forward Guidance and Strategic Initiatives
Market Conditions and Analyst Questions
Key Analyst Topics
Conclusion
Goldman Sachs demonstrated strong financial performance in 2024 and is optimistic about 2025, driven by favorable market conditions, strategic initiatives, and efficiency improvements. The firm remains focused on delivering value to clients and shareholders while navigating potential risks in a dynamic environment.
Earnings Report
Goldman Sachs (GS) Full Year and Fourth Quarter 2024 Earnings Results
Goldman Sachs has released its earnings results for the fiscal year and fourth quarter of 2024, showcasing significant growth and strong financial performance across its business segments. Below are the key highlights:
Full Year 2024 Highlights
Fourth Quarter 2024 Highlights
Segment Performance
Global Banking & Markets
Asset & Wealth Management
Platform Solutions
Operating Expenses and Efficiency
Capital Return and Dividend
Key Trends and Strategic Focus
Goldman Sachs' strong performance in 2024 reflects its ability to capitalize on market opportunities, execute strategic priorities, and deliver value to shareholders. The firm remains well-positioned for continued growth in 2025.
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