10-QPeriod: Q3 FY2023

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

Filed November 3, 2023For Securities:GSGS-PAGS-PCGS-PDGSCE

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.

Financial Highlights

37 data points
Beta

Net Income

$2.06B

EPS (Diluted)

$5.47

Total Assets

$1.58T

Cash & Equivalents

$239.88B

Free Cash Flow

-$26.04B

Financial Statements
Beta
Interest Expense$16.71B
Net Income$2.06B
EPS (Basic)$5.52
EPS (Diluted)$5.47
Shares Outstanding (Basic)338.70M
Shares Outstanding (Diluted)343.90M

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.

Frequently Asked Questions

The primary driver for the decrease in net earnings was a significant decline in net revenues from Asset & Wealth Management, primarily due to net losses in Equity investments and lower Incentive fees, which were partially offset by increases in Global Banking & Markets and Platform Solutions.

Operating expenses increased by 18% year-over-year to $9.05 billion in the third quarter of 2023. This increase was mainly due to higher compensation and benefits expenses, a $506 million write-down of intangible assets related to GreenSky, and $358 million in impairments for commercial real estate investments.

Goldman Sachs maintained a strong capital position with a Common Equity Tier 1 (CET1) capital ratio of 14.8% under both Standardized and Advanced Capital Rules as of September 30, 2023. The firm also returned $2.44 billion to shareholders through dividends and share repurchases.

Yes, the firm announced agreements to sell its Personal Financial Management business, expected to close in the fourth quarter of 2023, and GreenSky, expected to close in the first quarter of 2024.