01—Abstract
Summary
Summary of the 10-Q filed May 4, 2023. Cited figures are marked; the original filing is the authoritative source.
Goldman Sachs Group Inc. reported net earnings of $3.23 billiona for the first quarter of 2023, a decrease from $3.94 billion in the prior year period.
Diluted earnings per share (EPS) were $8.79b, down from $10.76 year-over-year. Net revenues declined 5% to $12.22 billion, primarily driven by a 26% drop in investment banking fees and lower market-making revenues. However, these declines were partially offset by an 11% increase in investment management revenues and significant growth in Platform Solutions.
The firm's provision for credit losses swung from a net provision of $561 millionc in Q1 2022 to a net benefit of $171 million in Q1 2023. This shift was largely due to a reserve reduction related to the partial sale and transfer to held-for-sale of the Marcus loans portfolio. Operating expenses increased by 9% to $8.40 billion, mainly due to real estate investment impairments, the inclusion of NN Investment Partners, and higher technology and transaction-based expenses, leading to an elevated efficiency ratio of 68.7% compared to 59.7% in the prior year.
Despite the headwinds in investment banking and market-making, the firm's Asset & Wealth Management segment showed resilience, and the Platform Solutions segment experienced substantial revenue growth. Goldman Sachs remains well-capitalized, with a Common Equity Tier 1 (CET1) capital ratio of 14.8%d under Standardized Capital Rules, exceeding regulatory requirements.
02—Key points
Key Highlights
- Net earnings decreased by 17.5% to $3.23 billion compared to $3.94 billion in Q1 2022.
- Diluted EPS fell to $8.79 from $10.76 in the prior year quarter.
- Total net revenues decreased by 5% to $12.22 billion, impacted by lower Investment Banking and Market Making revenues.
- Asset & Wealth Management revenues increased by 24% to $3.22 billion, driven by higher Management and other fees and positive Equity investment performance.
- Provision for credit losses improved significantly, turning into a net benefit of $171 million from a net provision of $561 million in Q1 2022.
- Operating expenses increased by 9% to $8.40 billion, resulting in a higher efficiency ratio of 68.7%.
- The firm returned $3.41 billion to shareholders in Q1 2023 through share repurchases ($2.55 billion) and dividends ($868 million).
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2023filed May 4, 2023Financial Statements
Q1 FY2023 against Q1 FY2022
| Line item | Q1 FY2023Q1 FY2022 | Change |
|---|---|---|
| Interest Expense | $13.16B$1.39B | +850.0% |
| Net Income | $3.23B$3.94B | −17.9% |
| EPS (Basic) | $8.87$10.87 | −18.4% |
| EPS (Diluted) | $8.79$10.76 | −18.3% |
| Shares Outstanding (Basic) | 346.60M351.20M | −1.3% |
| Shares Outstanding (Diluted) | 351.30M355.90M | −1.3% |
05—Questions
Frequently Asked Questions
What was Goldman Sachs' net earnings and EPS for Q1 2023?
Goldman Sachs reported net earnings of $3.23 billion, or $8.79 per diluted share, for the first quarter of 2023.
How did the different business segments perform?
Global Banking & Markets saw a decline in revenues, primarily due to lower investment banking fees and market-making activity. Asset & Wealth Management revenues increased, driven by higher management fees and gains in equity investments. Platform Solutions experienced significant revenue growth. The provision for credit losses improved to a net benefit in Q1 2023.
What factors contributed to the increase in operating expenses?
Operating expenses increased by 9% year-over-year due to impairments on consolidated real estate investments, the inclusion of NN Investment Partners, and higher technology and transaction-based expenses.
How is the company's capital position?
Goldman Sachs maintained a strong capital position, with its Common Equity Tier 1 (CET1) capital ratio at 14.8% under Standardized Capital Rules and 14.5% under Advanced Capital Rules as of March 31, 2023, well above regulatory minimums.
06—Continue