No bad stock

The Goldman Sachs Group, Inc.
CEO : Mr. David Solomon

Quarterly earnings growth(YoY,%)

Period	Revenue	Operating Income	EPS	Release Date
2024 Q3	7.5% YoY	20.4%	54.3%	2025-01-15

David Solomon says,

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Financial Performance Overview

• Revenues for Q4 reached $13.9 billion, with Earnings Per Share (EPS) at $11.95.
• Return on Equity (ROE) was reported at 14.6% and Return on Tangible Equity (ROTE) at 15.5%.
• Year-over-year revenue increased by 16% to $53.5 billion.
• EPS grew by a remarkable 77% to $40.54 for the full year.
• The company improved its ROE by over 500 basis points to 12.7%.

Strategic Highlights and Achievements

• Maintained position as the number one M&A advisor in Investment Banking.
• Global Banking and Markets achieved average revenues of $33 billion over five years.
• Investment in talent is crucial; over 40% of partners started as campus hires.
• Assets under supervision hit a record with $3.1 trillion as a key asset and wealth management achievement.

Asset and Wealth Management Growth

• Management and other fees surpassed $10 billion, exceeding 2024 targets.
• Alternative fundraising topped $70 billion.
• Pre-tax margin improved, reaching medium-term targets in 2024.
• Total client assets in Wealth Management rose to $1.6 trillion.

Operational Efficiency and Future Strategies

• Launched a three-year program to manage and optimize expenses.
• Focused on leveraging AI to transform engineering capabilities and improve client experiences.
• Announced the creation of the Capital Solutions Group to expand financing and origination capabilities.

Regulatory Challenges and Outlook

• Goldman Sachs joined a lawsuit against the Federal Reserve to address stress testing transparency.
• Seeks a more efficient regulatory process to support economic growth.
• The firm is committed to serving clients and achieving strong shareholder returns with a focus on excellence.

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Denis Coleman says,

Financial Performance Overview

• Net revenues for Q4 2024 were $13.9 billion, contributing to full-year earnings per share (EPS) of $40.54.
• Return on Equity (ROE) for Q4 was 14.6%, and Return on Tangible Equity (ROTE) was 15.5%.
• The firm achieved an ROE of 12.7% for the full year.
• Operating expenses for the year totaled $33.8 billion, with a compensation ratio net of provisions at 32%.

Global Banking & Markets Segment

• Annual revenues for this segment were $35 billion, increasing 16% from the previous year.
• Investment banking fees rose to $2.1 billion in Q4, a 24% year-over-year increase.
• Equity underwriting revenues increased significantly to $499 million, supporting strong issuance activity.
• FICC net revenues surged to $2.7 billion for the quarter, up 35% year-over-year.

Asset & Wealth Management Performance

• Revenues for 2024 were $16.1 billion, marking a 16% increase year-over-year.
• Record management and other fees amounted to $2.8 billion, up 8% sequentially and 15% year-over-year.
• Total assets under supervision reached a record $3.1 trillion, with $70 billion of liquidity products net inflows.

Capital Management and Outlook

• The common equity Tier 1 ratio was 15% at the end of Q4, exceeding the capital requirement by 130 basis points.
• Approximately $3 billion was returned to common shareholders in Q4, including $2 billion in stock repurchases and $965 million in dividends.
• The effective tax rate for 2024 was 22.4%, with expectations for a rate of approximately 20% in 2025.

Key Strategic and Market Insights

• Strong client dialogues and increased CEO confidence suggest optimism for M&A and IPO activity in 2025.
• Expectations are for reduced regulatory burdens, potentially benefiting risk assets and capital deployment.
• The firm is focused on driving efficiencies to enhance productivity and achieve through-the-cycle targets.

Q & A sessions,

Regulatory and Capital Requirements

• Capital Requirements: The firm stresses the importance of a more transparent and consistent capital system, suggesting that the current CCAR (Comprehensive Capital Analysis and Review) process lacks transparency and may be legally inappropriate.
• Changes in the administration and Federal Reserve leadership might lead to different approaches to Basel III and G-SIB (Global Systemically Important Banks) calibrations.
• The industry is hopeful for progress in improving the transparency, clarity, and consistency of capital requirements, which could greatly benefit the system and capital markets.

Strategic Business Focus

• The firm is primarily focusing on two business platforms: Global Banking & Markets and Asset & Wealth Management.
• Global Banking & Markets aims to maintain mid-teens returns through efficiencies in investment banking, capital markets, and trading.
• The Asset & Wealth Management division has met medium-term margin targets, but aims to further improve returns to mid-teens or higher by scaling its alternative platforms and growing management fees.
• The platform solutions, including the Apple Card, will aim for pretax breakeven by 2025, reducing its current drag on overall ROE.

Financial Performance and Guidance

• Fourth-quarter revenues reached $13.9 billion, with earnings per share at $11.95, and ROE at 14.6%.
• Full-year revenue increased by 16% to $53.5 billion, while EPS grew by 77% to $40.54, and ROE improved by over 500 basis points to 12.7%.
• The aim is to achieve mid-teens returns across key business areas, supported by strong capital generation and efficient capital allocation.

Growth Opportunities and Market Outlook

• There’s an anticipation of a more constructive environment for capital markets in 2025, expecting normalization to historical levels rather than a return to the anomalies of 2021.
• The firm is positioned to increase its market share in capital solutions by leveraging its unique intersection between public and private markets.
• Growth opportunities are identified in Wealth Management and Alternatives, with expectations of high-single-digit annual growth in durable revenue streams.

Technological and Operational Efficiency

• Focused on enhancing operational efficiency through technology and automation, aiming to reinvest savings into growth and client experience improvement.
• Plans to leverage AI solutions to modernize technology infrastructure and enhance productivity.
• Strategic expansion in key locations and streamlining of organizational structures to optimize expenses and resources.