10-KPeriod: FY2019

GOLDMAN SACHS GROUP INC Annual Report, Year Ended Dec 31, 2019

Filed February 21, 2020For Securities:GSGS-PAGS-PCGS-PDGSCE

Summary

Goldman Sachs Group, Inc. reported net earnings of $8.47 billion 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 billion, 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 billion, 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.

Financial Highlights

35 data points
Beta

Net Income

$8.47B

EPS (Diluted)

$21.03

Total Assets

$992.97B

Cash & Equivalents

$133.55B

Free Cash Flow

$15.43B

Financial Statements
Beta
Interest Expense$17.38B
Net Income$8.47B
EPS (Basic)$21.18
EPS (Diluted)$21.03
Shares Outstanding (Basic)371.60M
Shares Outstanding (Diluted)375.50M

Key Highlights

  • 1Net earnings for 2019 decreased by 19% to $8.47 billion, impacted by $1.24 billion in litigation and regulatory provisions.
  • 2Total net revenues remained largely flat at $36.55 billion, with a decline in Investment Banking offset by growth in Global Markets (FICC).
  • 3Provision for credit losses increased by 58% to $1.07 billion, mainly due to higher impairments on corporate and credit card loans.
  • 4Operating expenses rose by 6% to $24.90 billion, resulting in an increased efficiency ratio of 68.1%.
  • 5Goldman Sachs returned $6.88 billion to shareholders through share repurchases ($5.34 billion) and dividends ($1.54 billion).
  • 6Book value per common share increased by 5.4% to $218.52.
  • 7The 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.

Frequently Asked Questions

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.

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.

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.

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.