01—Abstract
Summary
Summary of the 10-K filed February 21, 2020. Cited figures are marked; the original filing is the authoritative source.
Goldman Sachs Group, Inc. reported net earnings of $8.47 billiona for the fiscal year ended December 31, 2019, a decrease of 19% from $10.46 billion in 2018.
This decline was attributed to several factors, including significant net provisions for litigation and regulatory proceedings totaling $1.24 billionb, which negatively impacted diluted earnings per share and return on equity. Despite a slight decrease in net revenues to $36.55 billion (largely unchanged from 2018), primarily due to lower performance in Investment Banking (underwriting and financial advisory), the company saw a slight increase in net revenues from Global Markets, driven by higher contributions from Fixed Income, Currency, and Commodities (FICC). The company also experienced a notable 58% increase in its provision for credit losses, primarily linked to corporate loans and credit card portfolios.
Operating expenses increased by 6% to $24.90 billionc, leading to a higher efficiency ratio of 68.1% compared to 64.1% in the prior year. The company returned substantial capital to shareholders in 2019, with $5.34 billion in common share repurchases and $1.54 billion in dividends, underscoring a commitment to shareholder value.
02—Key points
Key Highlights
- Net earnings for 2019 decreased by 19% to $8.47 billion, impacted by $1.24 billion in litigation and regulatory provisions.
- Total net revenues remained largely flat at $36.55 billion, with a decline in Investment Banking offset by growth in Global Markets (FICC).
- Provision for credit losses increased by 58% to $1.07 billion, mainly due to higher impairments on corporate and credit card loans.
- Operating expenses rose by 6% to $24.90 billion, resulting in an increased efficiency ratio of 68.1%.
- Goldman Sachs returned $6.88 billion to shareholders through share repurchases ($5.34 billion) and dividends ($1.54 billion).
- Book value per common share increased by 5.4% to $218.52.
- The company is executing strategic initiatives to achieve $1.3 billion in expense efficiencies and $1.0 billion in interest expense savings over the next three years.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2019filed February 21, 2020Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Interest Expense | $17.38B$15.91B | +9.2% |
| Net Income | $8.47B$10.46B | −19.1% |
| EPS (Basic) | $21.18$25.53 | −17.0% |
| EPS (Diluted) | $21.03$25.27 | −16.8% |
| Shares Outstanding (Basic) | 371.60M385.40M | −3.6% |
| Shares Outstanding (Diluted) | 375.50M390.20M | −3.8% |
05—Questions
Frequently Asked Questions
What was the overall financial performance of Goldman Sachs in 2019 compared to 2018?
In 2019, Goldman Sachs reported a net earnings of $8.47 billion, a decrease of 19% from $10.46 billion in 2018. This reduction was primarily due to higher litigation and regulatory provisions and increased credit loss provisions, which offset slightly improved performance in Global Markets.
How did the different business segments perform in 2019?
Net revenues were relatively flat year-over-year. Investment Banking saw a decline in revenues, primarily from underwriting and financial advisory, while Global Markets experienced a slight increase, driven by FICC activities. Asset Management and Consumer & Wealth Management revenues remained largely unchanged.
What is the company's strategy for improving profitability and shareholder returns?
Goldman Sachs announced strategic initiatives aimed at improving profitability and shareholder returns, including achieving $1.3 billion in expense efficiencies and $1.0 billion in interest expense savings over the next three years through funding optimization and deposit growth.
How is Goldman Sachs managing its capital and returning value to shareholders?
The company has a strong capital position, with a Common Equity Tier 1 (CET1) capital ratio of 13.3% under Standardized Capital Rules. In 2019, Goldman Sachs returned $6.88 billion to common shareholders through $5.34 billion in share repurchases and $1.54 billion in dividends, demonstrating a commitment to capital return.
06—Continue