GOLDMAN SACHS GROUP INC Quarterly Report for Q3 Ended Sep 30, 2023

Summary

Goldman Sachs Group, Inc. (GS) reported net earnings of $2.06 billion for the third quarter of 2023, a decrease from $3.07 billion in the same period last year, with diluted EPS of $5.47, down from $8.25. This decline was primarily driven by a significant drop in net revenues from Asset & Wealth Management, which was partially offset by higher net revenues in Global Banking & Markets and Platform Solutions. While net revenues remained largely stable year-over-year at $11.82 billion, the firm's efficiency ratio worsened to 76.6% from 64.3% due to increased operating expenses, notably higher compensation and benefits, a substantial write-down of intangible assets related to GreenSky, and impairments in commercial real estate investments. Despite the weaker quarter-over-quarter profitability, the firm demonstrated resilience with strong capital ratios, maintaining a Common Equity Tier 1 (CET1) capital ratio of 14.8% under both Standardized and Advanced Capital Rules. The company returned $2.44 billion to shareholders through repurchases and dividends, underscoring a commitment to capital deployment. The firm also continues to strategically divest non-core assets, announcing agreements to sell its Personal Financial Management business and GreenSky. Looking ahead, Goldman Sachs anticipates its effective income tax rate to be under 23% for 2023.

Key Highlights

• 1Net earnings for Q3 2023 were $2.06 billion, down from $3.07 billion in Q3 2022.
• 2Diluted EPS decreased to $5.47 from $8.25 year-over-year.
• 3Total net revenues were stable at $11.82 billion, with Asset & Wealth Management revenues declining while Global Banking & Markets and Platform Solutions saw increases.
• 4Operating expenses increased by 18% year-over-year to $9.05 billion, leading to a higher efficiency ratio of 76.6%.
• 5Provision for credit losses significantly decreased to $7 million from $515 million year-over-year.
• 6Common Equity Tier 1 (CET1) capital ratio remained strong at 14.8%.
• 7Capital returned to shareholders totaled $2.44 billion in Q3 2023, including $1.50 billion in common stock repurchases.

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