Goldman-Sachs-Presentation

GoldmanSachsPresentationtoCreditSuisseFinancialServicesConferenceFebruary10,2015LloydC.BlankfeinChairmanandChiefExecutiveOfficerCautionaryNoteonForward-LookingStatementsToday’spresentationmayincludeforward-lookingstatements.ThesestatementsrepresenttheFirm’sbeliefregardingfutureeventsthat,bytheirnature,areuncertainandoutsideoftheFirm’scontrol.TheFirm’sactualresultsandfinancialconditionmaydiffer,possiblymaterially,fromwhatisindicatedinthoseforward-lookingstatements.ForadiscussionofsomeoftherisksandfactorsthatcouldaffecttheFirm’sfutureresultsandfinancialcondition,pleaseseethedescriptionof“RiskFactors”inourannualreportonForm10-KfortheyearendedDecember31,2013.Youshouldalsoreadtheforward-lookingdisclaimerinourquarterlyForm10-QfortheperiodendedSeptember30,2014,particularlyasitrelatestoestimatedcapitalandleverageratios,andinformationonthecalculationofnon-GAAPfinancialmeasuresthatispostedontheInvestorRelationsportionofourwebsite:’vebeen,andwherewe’reheaded1StrongFinancialFoundationOperatingStrategyCapitalizeontheForwardMaintainfranchiseandtargetnewopportunitiesEfficientlymanagetheleverswecan:Capital&ExpensesDefendreturnsinachallengingenvironmentWellpositionedforfuturegrowthopportunities—SignificantembeddedoperatingleverageThestartingpointofeverythingwedo—Helpsensurestabilityandpositionsforopportunity—PositionsfirmtoaddvaluewhenitmattersmostSignificantlyImprovedFinancialProfile2BalanceSheetCommonEquityGrossLeverageLiquidityLevel3Assets4Q07$42bn$1,120bn$40bn26.2x$61bn1$69bn$856bn$74bn10.3x$183bn4Q14-24%+85%-61%+3.0x-39%Underpinningtheseimprovementsarenewregulationsthatlock-inliquidityandcapitalathistoricallyhighlevelsandreduceriskBaselIIICapitalRequirementsSupplementaryLeverageRatioCCARStressTestTotalLossAbsorbingCapacityLiquidityCoverageRatioNetStableFundingRatioSafety&SoundnessOperatingStrategyCapitalizeonOpportunities1Priorto4Q09,GCEreflectsloanvalueandsubsequentperiodsreflectfairvalueInstitutionalFocusDrivesRevenueOpportunities3Institutional90+%Retail10%2GS2014NetRevenueBreakdownEstimatedUSPeerAverage2014NetRevenueBreakdown3CapitalMarkets1AssetManagementInvestingPrivateWealthManagement1Comprisedofinvestmentbankingandmarket-makinginequities,fixedincome,currenciesandcommodityproducts2ReflectsrevenuesfromPrivateWealthManagement,inclusiveoflendingtohighnetworthclients3USpeerscomprisedofBAC,C,JPM,andMS4TotalStaffGSisinstitutionallyfocusedoncapitalmarketswithsignificantconcentrationofourbusinessesacrossasmallnumberofkeyentitiesBalanceSheetEmployees4$856bn34,000BalanceSheetEmployees$1,832bn190,000Safety&SoundnessOperatingStrategyCapitalizeonOpportunitiesInstitutional~50%Retail~50%IndustryBusinessActivitiesIndustryBusinessActivitiesCapitalMarkets1AssetManagementInvestingCommercialBankingTreasuryServicesMortgageServicingPrivateWealthManagementMortgageOriginationsConsumerBankingRetailBrokerageCreditCardsDiversifiedClient-DrivenFranchise4Safety&SoundnessOperatingStrategyCapitalizeonOpportunities19%20%17%2014NetRevenuesInstitutionalClientServices■~7,000activeclients,up12%since2010■LeadingfranchiseinbothFICCandEquities■Comprehensivesuiteofcapabilities—Liquidityprovisioning—Execution—TradeanalyticsInvestmentBanking■Morethan8,000clientsgloballyinnearly100countriesandabroadrangeofindustries■#1rankedmergeradvisorandequityunderwritingfranchise■Advice,capitalraising,hedgingandriskmanagementsolutionsInvesting&Lending■Diversifiedinvestments:—PrivateEquity—MezzanineDebt—SeniorLoans—RealEstate—Infrastructure■Generatingstrongrisk-adjustedreturnsfromInvesting&Lendingportfoliosoverthelong-termInvestmentManagement■~14,000clientsacrossPWM,InstitutionsandThirdPartyDistributors■AveragePWMaccountsizeof$40mm■Stronginvestmentperformanceforclientswith75%ofmutualfundassetsrankedinthe1stor2ndquartilesover5years■Global,broadanddeepofferingmanagingassetsinallmajorassetclassesandservingclientsinover120countries25%FICC19%EquitiesCaseStudy:InstitutionalClientServices55%4%CommoditiesCurrenciesInterestRateProductsCreditProductsMortgagesEquitiesClientCommissionsExecutionandFeesSecuritiesServices11%16%8%19%11%11%9%8%17%16%15%17%14%12%9%18%16%14%ContributiontoICSRevenues(2010–2014)21%11%9%7%Max.Avg.Min.Adecadeago,weconsolidatedourmanagementofFICCandEquitiestorunourbusinessesinaggregate—Consistentwithourclientswhousemultipleproducts,ourapproachprovidesefficiency,bettercontentandideageneration—AllowsustorespondtochangesinclientactivityBalancedofferingprovidesstabilitytorevenues,earningsandreturnsOverthepast5years,nobusinesshascontributedmorethan21%orlessthan4%ofICSrevenuesonanannualbasisSafety&SoundnessOperatingStrategyCapitalizeonOpportunitiesVariableCostStructure6Safety&SoundnessOperatingStrategyCapitalizeonOpportunities$30$20$10$0$4020002006201420022004FirmwideNetRevenues20102012CompensationExpense($bn)2000–2014R2=91%12008includesDecember20081Ourvariablecoststructureprovidesacompetitiveadvantageandavaluablelevertoprotectthefirm2000–