The Goldman Sachs (GS) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 19, 2023 9:30 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good morning. My name is Katie and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs Second Quarter 2023 Earnings Conference Call. This call is being recorded today, July 19, 2023. Thank you. Ms. Halio, you may begin your conference.

Carey Halio

Thank you. Good morning. This is Carey Halio, Head of Investor Relations and Chief Strategy Officer at Goldman Sachs. Welcome to our second quarter earnings conference call.

Today, we will reference our earnings presentation which can be found on the Investor Relations page of our website at www.gs.com. Note, [indiscernible] this information on forward-looking statements and non-GAAP measures appear on the earnings release and presentation. This audiocast is copyrighted material of the Goldman Sachs Group, Inc. and may not be duplicated, reproduced or rebroadcast without our consent. I'm joined today by our Chairman and Chief Executive Officer, David Solomon; and our Chief Financial Officer, Dennis Solomon.

Let me pass the call to David.

David Solomon

Thank you, Carey and good morning, everyone. Thank you all for joining us. This quarter, we produced net revenues of $10.9 billion and generated earnings per share of $3.08, an ROE of 4% and an ROTE of 4.4%.

Our results were impacted by several items related to businesses we are executing on a strategic transition and positioning the firm for the future. In particular, shifting our asset wealth management business to a less capital-intensive model and the pivot to narrow our consumer ambition. All in, these items reduced our EPS for the second quarter by $3.95 and our ROE by 5.2 percentage points. Our results were also impacted by the challenging macro environment and in particular, headwinds facing our specific mix of businesses.

Activity levels in many areas of investment banking hover near decade-long lows and clients largely maintained a risk-off posture over the course of the quarter. CEOs around the world continue to be cautious as businesses grapple with persistent inflation, geopolitical tensions and slower growth. But we know the corporate activity and capital formation are core to our financial system and there are a number of structural catalysts that should lead to increased levels of activity. And we're seeing it begin to pick up in a few spots already, particularly equity capital markets and M&A dialogue. There's no question, recent economic data in the U.S. indicates the Fed's efforts to fight inflation are showing progress and we are starting to see more optimism about the forward trajectory. However, the year unfolds, we stand ready to help our clients navigate the evolving backdrop while maintaining a prudent risk posture and operating the firm more efficiently.