Goldman Sachs Group, Inc. (the) · NYSE:GS
Goldman Sachs Group, Inc. (the) — Q1 2019 Earnings Presentation
23 slides from Goldman Sachs Group, Inc. (the)'s earnings presentation, Apr 15, 2019
Slide 1: First Quarter 2019 Earnings Results Presentation
Exhibit 99.2 First Quarter 2019 Earnings Results Presentation April 15, 2019
Slide 2: Earnings Call Agenda
Earnings Call Agenda 1 David M. Solomon, Chairman and Chief Executive Officer Financial Highlights Operating Environment Observations on Strategy 2 Stephen M. Scherr, Chief Financial Officer Update on Front-to-Back Reviews Next Steps in Investor Communications Financial Results 3 Q&A
Slide 3: Results Snapshot
Results Snapshot Net Revenues Net Earnings EPS 1Q19 $8.81 billion 1Q19 $2.25 billion 1Q19 $5.71 Annualized OE1 Annualized ROTE1 1Q19 Book Value VPS $209.07 1Q19 11.1% 1Q19 11.7% 1 TBVPS $198.25 Highlights #1 in Completed M&A2 Record net interest income in Debt I&L Strong net revenues in Financial Ad
Slide 4: Macro Perspectives and Outlook
Macro Perspectives and Outlook Economic fundamentals 1Q19 Market dynamics resulted in remain constructive mixed client activity Continued positive global growth amidst 32% accommodative monetary policy 13% 12% 2019 +2.5% +3.4% GS Research est. U.S. Global S&P 500 MSCI WTIGDP growth: World Crude Back
Slide 5: Observations on Strategy
Observations on Strategy Primary Objectives Diversify Our Business Mix Grow and Strengthen Our Achieve Greater with New Products and Existing Businesses Operating Efficiency Services Key Tenets of Our Strategy Investing in Delivering Pursuing Expanding Our alent, Enhancing Market “One Firm” to Adjac
Slide 6: Innovation Driving Growth Opportunities
Innovation Driving Growth Opportunities The Goldman Sachs partnership with Apple includes key elements that underpin many other strategic growth initiatives across the firm Reimagined Products Marcus Mass Affluent No Legacy Technology Wealth Management Digital Delivery Marquee Broad Acquisition Chan
Slide 7: Overview of Front-to-Back Reviews
Overview of Front-to-Back Reviews FRONT: Revenue Expansion Grow Diversify Streamline Optimize Addressable Experience and Funding through Operational Resource Market Engagement Deposits Delivery Consumption BACK: Resource Optimization
Slide 8: Revenue Expansion
Revenue Expansion Investment Institutional Client Investing & Investment Banking Services Lending Management ï® Expand market ï® Continue increasing ï® Augment fee-based ï® Expand product reach of the wallet share with investing model and geographic franchise institutional clients ï® Continue franch
Slide 9: Resource Optimization
Resource Optimization Capital and Funding Platforms Organizational Structure ï® Diversify funding mix by ï® Continue development of ï® Streamline organizational increasing deposits strategic, low-touch client structure platforms ï® Optimize capital allocation, ï® Integrate more operations notably in
Slide 10: Next Steps in Investor Communications
Next Steps in Investor Communications Today’s discussion What to expect in the coming months Finalize Performance Targets Update on Provide Front-to-Back Comprehensive Reviews Strategic Update Review Financial Disclosure
Slide 11: Financial Overview
Financial Overview Financial Results Quarterly Net Revenue Mix by Segment 1Q19 vs. 4Q18 vs. 1Q18 Investment Investment $ in millions, except per share amounts Management Banking Investment Banking $1,810 -11% 1% 18% (Financial 20% Advisory FICC 1,839 124% -11% 10%) (Underwriting Equities 1,766 10% -
Slide 12: Investment Banking Financial Results
Investment Banking Financial Results Key Investment Banking Highlights vs. 1Q18 ï® Financial Advisory 1Q19 net revenues reflect strong M&A volumes $ in millions 1Q19 vs. 4Q18 and leading market share; down significantly versus strong 4Q18, but Financial Advisory $ 887 -26% 51% significantly higher Y
Slide 13: Institutional Client Services – FICC Financial Results
Institutional Client Services – FICC Financial Results Key FICC Highlights vs. 1Q18 1Q19 net revenues more than doubled QoQ, reflecting increases $ in millions 1Q19 vs. 4Q18 across all major businesses as market backdrop improved FICC $ 1,839 124% -11% 1Q19 net revenues decreased YoY, reflecting low
Slide 14: Institutional Client Services – Equities Financial Results
Institutional Client Services – Equities Financial Results Key Equities Highlights 1Q19 net revenues higher QoQ on significantly higher equities client $ in millions 1Q19 vs. 4Q18 vs. 1Q18 execution net revenues FICC $ 1,839 124% -11% ï® 1Q19 net revenues significantly decreased YoY as market backdr
Slide 15: Investing & Lending Equity Securities Financial Results
Investing & Lending Equity Securities Financial Results $ in millions 1Q19 vs. 4Q18 vs.1Q18 Equity securities $ 847 -15% -21% Debt securities and loans 990 9% -7% Total Investing & Lending $ 1,837 -4% -14% Equity I&L Net Revenues ($ in millions) $1,281 $1,111 $1,069 40% $994 30% 41% $847 52% 41% 70%
Slide 16: Investing & Lending – Debt Securities and Loans Financial Results
Investing & Lending – Debt Securities and Loans Financial Results Key Debt I&L Highlights Record net interest income in 1Q19 of $835 million (~$3.3 billion $ in millions 1Q19 vs. 4Q18 vs.1Q18 annual pace) Equitysecurities $ 847 -15% -21% ï® Franchise adjacent loan portfolio continues to complement o
Slide 17: Investment Management Financial Results
Investment Management Financial Results Key Investment Management Highlights 1Q19 net revenues decreased YoY, reflecting significantly lower $ in millions 1Q19 vs. 4Q18 vs. 1Q18 incentive fees and lower transaction revenues Management and other fees $ 1,332 -2% -1% ï® AUS3 increased $57 billion in 1
Slide 18: Expenses Financial Results
Expenses Financial Results Key Expense Highlights 1Q19 total operating expenses decreased YoY (-$753 million), $ in millions 1Q19 vs. 4Q18 vs. 1Q18 including: Compensation and benefits $ 3,259 75% -20% — Significantly lower compensation and benefits expenses (-$798 million) Brokerage, clearing, exch
Slide 19: Capital
Capital Financial Metrics3,4 Key Capital Highlights $ in billions ï® CET1 ratios improved QoQ 1Q19 4Q18 — Driven by increase in retained earnings and lower market Common equity tier 1 (CET1) $ 74.7 $ 73.1 RWAs Partially offset by increase in credit RWAs Standardized RWAs $ 544 $ 548 ï® Returned $1.5
Slide 20: Balance Sheet & Liquidity
Balance Sheet & Liquidity Balance Sheet Allocation4,6 Key Balance Sheet & Liquidity Highlights Highly liquid balance sheet and robust liquidity metrics allow the $ in billions 1Q19 4Q18 firm to capitalize on market opportunities GCLA, segregated assets and other $ 279 $ 313 — GCLA3 averaged $234 bil
Slide 21: Cautionary Note on Forward-Looking Statements
Cautionary Note on Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts, but instead represent only the fir
Slide 22: Footnotes
Footnotes (1) Annualized return on average common shareholders’ equity (ROE) is calculated by dividing annualized net earnings applicable to common shareholders by average monthly common shareholders’ equity. Tangible common shareholders’ equity is calculated as total shareholders’ equity less prefe
Slide 23: Footnotes (6)
Footnotes(6) In addition to preparing the firm’s consolidated statements of financial condition in accordance with U.S. GAAP, the firm prepares a balance sheet that generally allocates assets to the firm’s businesses, which is a non-GAAP presentation and may not be comparable to similar non-GAAP pre