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GOLDMAN SACHS GROUP INC Quarterly Report for Q1 Ended Feb 29, 2008

Filing Date
Filed April 9, 2008
Period End
February 29, 2008
In the record · 2016–202610-K1310-Q328-K228

GS filed 13 annual reports (10-K), 32 quarterly reports (10-Q) and 228 current reports (8-K) between 2016 and 2026.

  1. FY2018 annual report10-K · Feb ’19Feb ’19
  2. Leadership change8-K · May ’21May ’21
  3. Leadership change8-K · Apr ’25Apr ’25

01—Abstract

Summary

Summary of the 10-Q filed April 9, 2008. Cited figures are marked; the original filing is the authoritative source.

Goldman Sachs Group, Inc. (GS) reported its first quarter 2008 results, with diluted earnings per share of $3.23a, a significant decrease from $6.67 in the prior year period.

This decline was driven by challenging market conditions, particularly the continued deterioration in credit markets which impacted "Trading and Principal Investments" results. Specifically, net losses on residential mortgage loans and securities were approximately $1 billionb, and credit origination activities incurred losses of approximately $1 billion before hedges. Investment Banking revenues also fell year-over-year due to weaker underwriting and financial advisory activity.

However, the Asset Management and Securities Services segment showed strong growth, with net revenues increasing significantly, driven by higher fees and increased customer balances, and assets under management reaching a record $873 billionc. The company's total assets grew to $1.19 trillion, while shareholders' equity slightly decreased to $42.63 billion.

Operating expenses were down 21%d compared to the prior year, largely due to reduced compensation and benefits, though non-compensation expenses increased by 24%. Despite the difficult environment, Goldman Sachs maintained a strong liquidity position, with substantial excess liquidity to manage potential cash outflows.

02—Key points

Key Highlights

  1. Diluted Earnings Per Share (EPS) decreased to $3.23 from $6.67 in the prior year period.
  2. Total net revenues declined to $8.34 billion from $12.73 billion in the prior year period.
  3. Trading and Principal Investments segment experienced a significant revenue decline of 46%, impacted by credit market deterioration and losses in principal investments.
  4. Investment Banking segment revenues decreased by 32% due to weaker underwriting and financial advisory activity.
  5. Asset Management and Securities Services segment showed robust growth with a 28% increase in net revenues.
  6. Assets under management reached a record $873 billion.
  7. Operating expenses decreased by 21% compared to the prior year, primarily due to lower compensation and benefits.
  8. The company maintained a strong liquidity position with substantial excess liquidity.

03—Questions

Frequently Asked Questions

  1. What was the primary driver for the significant decrease in net earnings?

    The primary driver for the significant decrease in net earnings was the challenging market conditions, particularly the continued deterioration in credit markets. This led to substantial losses in the "Trading and Principal Investments" segment, including net losses on residential mortgage loans and securities, and losses from credit origination activities and principal investments.

  2. How did the different business segments perform?

    The "Trading and Principal Investments" segment saw a significant revenue decline, impacted by credit market weakness. The "Investment Banking" segment also experienced a revenue decrease due to lower underwriting and financial advisory activity. In contrast, the "Asset Management and Securities Services" segment demonstrated strong performance with increased revenues, driven by higher fees and customer balances, and achieved record assets under management.

  3. What is the company's liquidity position and capital adequacy?

    Goldman Sachs maintained a strong liquidity position, with substantial excess liquidity held in highly liquid securities. The company's total shareholders' equity was $42.63 billion, and it remained in compliance with its Consolidated Supervised Entity (CSE) capital adequacy standards.

  4. What impact did the challenging credit markets have on specific areas?

    The challenging credit markets led to net losses of approximately $1 billion on residential mortgage loans and securities, and approximately $1 billion in losses (before hedges) related to non-investment-grade credit origination activities within the "Trading and Principal Investments" segment. These conditions also impacted the "Investment Banking" segment's debt underwriting revenues, particularly in leveraged finance and mortgage-related activity.

04—Continue

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