10-QPeriod: Q3 FY2021

GOLDMAN SACHS GROUP INC Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 1, 2021For Securities:GSGS-PAGS-PCGS-PDGSCE

Summary

Goldman Sachs Group, Inc. (GS) reported strong financial results for the third quarter and first nine months of 2021. Net revenues saw a significant increase year-over-year, driven by robust performance across Investment Banking, Global Markets, and Consumer & Wealth Management segments. Investment Banking benefited from strong M&A advisory and underwriting activity, while Global Markets saw increased revenues in Equities, partially offset by softer performance in FICC products. The Asset Management segment experienced lower revenues due to a decline in Equity investments, but overall firm-wide net revenues increased substantially, leading to a significant rise in net earnings and diluted EPS. The company's capital position remains strong, with well-capitalized regulatory ratios exceeding requirements. GS also announced strategic acquisitions in the Asset Management and Consumer & Wealth Management segments, indicating a focus on long-term growth. The firm's liquidity position is robust, supported by a significant amount of High-Quality Liquid Assets (HQLA). The provision for credit losses decreased significantly year-over-year, reflecting an improved economic outlook and the unwinding of pandemic-related provisions.

Financial Highlights

34 data points
Beta

Net Income

$5.38B

EPS (Diluted)

$14.93

Total Assets

$1.44T

Cash & Equivalents

$211.83B

Free Cash Flow

-$40.14B

Financial Statements
Beta
Interest Expense$1.55B
Net Income$5.38B
EPS (Basic)$15.14
EPS (Diluted)$14.93
Shares Outstanding (Basic)348.30M
Shares Outstanding (Diluted)353.90M

Key Highlights

  • 1Net revenues increased 26% year-over-year for Q3 2021 to $13.61 billion, and 42% year-over-year for the first nine months of 2021 to $46.70 billion.
  • 2Diluted EPS rose 66% year-over-year for Q3 2021 to $14.93 and was up significantly for the first nine months of 2021 to $48.59.
  • 3Investment Banking revenues more than doubled year-over-year in Q3 2021, driven by strong M&A and underwriting activity.
  • 4Global Markets revenues increased 23% year-over-year in Q3 2021, with Equities performance notably strong.
  • 5Provision for credit losses decreased substantially, from $278 million in Q3 2020 to $175 million in Q3 2021, and from $2.81 billion for the first nine months of 2020 to $13 million for the same period in 2021.
  • 6The Common Equity Tier 1 (CET1) capital ratio remained strong at 14.1% under Standardized Capital Rules and 13.9% under Advanced Capital Rules as of September 30, 2021.
  • 7The company announced two strategic acquisitions: NN Investment Partners in Asset Management and GreenSky, Inc. in Consumer banking, both expected to close by Q1 2022.

Frequently Asked Questions

Goldman Sachs reported net revenues of $13.61 billion for the third quarter of 2021, a 26% increase compared to $10.78 billion in the third quarter of 2020. This growth was driven by strong performances in Investment Banking, Global Markets, and Consumer & Wealth Management.

The significant increase in Investment Banking revenue was primarily driven by higher revenues in Financial Advisory, reflecting increased M&A activity, and strong performance in Equity Underwriting, particularly from private placements and IPOs, as well as higher Debt Underwriting revenues due to increased leveraged finance activity.

The provision for credit losses decreased significantly. For Q3 2021, it was $175 million, down from $278 million in Q3 2020. For the first nine months of 2021, it was $13 million, a substantial decrease from $2.81 billion in the same period of 2020. This reduction reflects portfolio growth and an improved economic outlook.

Goldman Sachs maintained a strong capital position, with its Common Equity Tier 1 (CET1) capital ratio at 14.1% under Standardized Capital Rules and 13.9% under Advanced Capital Rules as of September 30, 2021, both well above regulatory minimums.