01—Abstract
Summary
Summary of the 10-K filed February 24, 2023. Cited figures are marked; the original filing is the authoritative source.
Goldman Sachs Group, Inc. reported net earnings of $11.26 billiona for 2022, a significant decrease from $21.64 billion in 2021, reflecting a challenging macroeconomic and geopolitical environment characterized by persistent inflation and rising interest rates.
Net revenues declined by 20% to $47.37 billionb, primarily driven by lower performance in Global Banking & Markets and Asset & Wealth Management segments, although the Platform Solutions segment saw significant revenue growth. The company's Global Banking & Markets segment experienced a notable drop in investment banking fees, down 48%, due to a decline in industry-wide underwriting volumes and M&A transactions. However, Fixed Income, Currency, and Commodities (FICC) intermediation revenues increased by 38%, driven by higher client activity in a volatile market.
Asset & Wealth Management revenues decreased by 39%, mainly due to lower net revenues from equity and debt investments, impacted by market conditions. The Platform Solutions segment, which includes consumer platforms and transaction banking, saw revenues more than double to $1.50 billionc, driven by growth in its credit card and point-of-sale financing businesses. Despite the year-over-year decline in profitability, Goldman Sachs maintained a strong capital position, with a CET1 capital ratio of 15.1% under Standardized Capital Rules.
The firm returned $6.70 billiond to shareholders through repurchases and dividends, underscoring its commitment to capital management. Provisions for credit losses increased substantially to $2.72 billion, primarily due to the growth of the credit card portfolio and broader economic concerns, indicating a more cautious outlook for credit quality.
02—Key points
Key Highlights
- Net earnings decreased significantly to $11.26 billion in 2022 from $21.64 billion in 2021, impacted by a challenging economic environment.
- Net revenues fell by 20% to $47.37 billion, primarily due to weaker performance in Global Banking & Markets and Asset & Wealth Management.
- Global Banking & Markets saw a 48% drop in investment banking fees, but FICC intermediation revenue increased by 38%.
- Asset & Wealth Management revenues decreased by 39% due to lower investment income from equity and debt portfolios.
- Platform Solutions segment revenue more than doubled, driven by growth in consumer platforms.
- Provisions for credit losses increased substantially to $2.72 billion, reflecting portfolio growth and economic concerns.
- The firm maintained a strong CET1 capital ratio of 15.1% and returned $6.70 billion to shareholders via dividends and repurchases.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 24, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Interest Expense | $21.35B$5.65B | +277.8% |
| Net Income | $11.26B$21.64B | −48.0% |
| EPS (Basic) | $30.42$60.25 | −49.5% |
| EPS (Diluted) | $30.06$59.45 | −49.4% |
| Shares Outstanding (Basic) | 352.10M350.50M | +0.5% |
| Shares Outstanding (Diluted) | 358.10M355.80M | +0.6% |
05—Questions
Frequently Asked Questions
What were the main drivers of the revenue decline in 2022?
The primary drivers of the 20% revenue decline in 2022 were significantly lower investment banking fees, particularly in underwriting due to reduced industry-wide volumes, and weaker performance in equity and debt investments within Asset & Wealth Management, impacted by market volatility and economic concerns. These were partially offset by strong growth in FICC intermediation and the Platform Solutions segment.
How did the business segments perform in 2022?
The Global Banking & Markets segment saw lower investment banking revenues but strong FICC intermediation. Asset & Wealth Management experienced a significant revenue decrease due to market impacts on investments. Platform Solutions showed substantial growth, more than doubling its revenue, primarily from consumer lending businesses.
What is the company's capital position and capital return strategy?
Goldman Sachs maintained a strong capital position with a CET1 capital ratio of 15.1% (Standardized) as of December 31, 2022. The company returned $6.70 billion to shareholders in 2022 through common stock repurchases ($3.50 billion) and dividends ($3.20 billion), reflecting its commitment to capital management and returning excess capital.
What is the outlook for credit provisions?
Provisions for credit losses increased significantly to $2.72 billion in 2022, up from $357 million in 2021. This increase was primarily driven by the growth in the credit card portfolio, net charge-offs, and the impact of broader macroeconomic and geopolitical concerns, suggesting a more cautious stance on credit quality moving forward.
06—Continue