EX-99.1 2 d730614dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

 

 

First Quarter

2019 Earnings

Results

 

    Media Relations: Jake Siewert 212-902-5400

    Investor Relations: Heather Kennedy Miner 212-902-0300    

 

   

 

The Goldman Sachs Group, Inc.      

200 West Street | New York, NY 10282      

 

   

First Quarter 2019 Earnings Results

Goldman Sachs Reports First Quarter Earnings Per Common Share of $5.71
and Increases the Quarterly Dividend to $0.85 Per Common Share

 

 

“We are pleased with our performance in the first quarter, especially in the context of a muted start to the year.        Our core businesses generated solid results driven by our strong franchise positions. We are focused on new        opportunities to grow and diversify our business mix and serve a broader range of clients globally. With improving        momentum across our businesses, we are confident that Goldman Sachs will generate attractive returns for our        shareholders.”

 

 

- David M. Solomon, Chairman and Chief Executive Officer       

 

 

 

     

    

     

  

 

Net Revenues

 

  

 

Net Earnings

 

  

 

EPS

 

 

$8.81 billion

 

  

 

$2.25 billion

 

  

 

$5.71

 

   

 

Annualized ROE (1)

 

  

 

Annualized ROTE  (1)

 

  

 

Book Value

 

11.1%

  

11.7%

  

BVPS                   $209.07

TBVPS (1)             $198.25

   

NEW YORK, April 15, 2019 – The Goldman Sachs Group, Inc. (NYSE: GS) today reported net revenues of $8.81 billion and      net earnings of $2.25 billion for the first quarter ended March 31, 2019.

Diluted earnings per common share (EPS) was $5.71 for the first quarter of 2019 compared with $6.95 for the first quarter of      2018 and $6.04 for the fourth quarter of 2018.

Annualized return on average common shareholders’ equity (ROE) (1) was 11.1% and annualized return on average tangible      common shareholders’ equity (ROTE) (1) was 11.7% for the first quarter of 2019.

1      

 

Goldman Sachs Reports

First Quarter 2019 Earnings Results

 

 

Highlights

 

 

 

◾

  

The firm ranked #1 in worldwide completed mergers and acquisitions for the year-to-date (2), which contributed to strong net revenues in Financial Advisory of $887 million. The firm also ranked #1 in worldwide equity and equity-related offerings and common stock offerings for the year-to-date (2).

 

 

 

◾

  

Investing & Lending net revenues included record quarterly net interest income in debt securities and loans of $835 million.

 

 

 

◾

  

In Investment Management, assets under supervision (3) increased $57 billion during the quarter to a record $1.60 trillion, including net inflows of $20 billion in long-term assets under supervision.

 

 

 

◾

  

The Standardized common equity tier 1 ratio (3) increased 40 basis points during the quarter to 13.7% (4) and the Basel III Advanced common equity tier 1 ratio (3) increased 30 basis points during the quarter to 13.4% (4).

 

 

 

◾

  

The firm returned $1.56 billion of capital to common shareholders during the first quarter of 2019, including $1.25 billion of share repurchases and $306 million of common stock dividends.

 

 

 

Quarterly Net Revenue Mix by Segment

 

LOGO

2      

 

Goldman Sachs Reports

First Quarter 2019 Earnings Results

 

 

Net Revenues

    

 

Net revenues were $8.81 billion for the first quarter of 2019, 13% lower than the first quarter of 2018 and 9% higher than the fourth quarter of 2018. The decrease compared with the first quarter of 2018 primarily reflected lower net revenues in Institutional Client Services and Investing & Lending.

  

  

  

 

Net Revenues

 

   

 

$8.81 billion

 

   

 

 

 

  

 

    Investment Banking  

 

  

 

  

 

Net revenues in Investment Banking were $1.81 billion for the first quarter of 2019, essentially unchanged compared with the first quarter of 2018 and 11% lower than the fourth quarter of 2018.

 

Net revenues in Financial Advisory were $887 million, 51% higher than the first quarter of 2018, reflecting an increase in completed mergers and acquisitions volumes.

 

Net revenues in Underwriting were $923 million, 24% lower than the first quarter of 2018, due to significantly lower net revenues in equity underwriting, primarily reflecting a significant decline in industry-wide initial public offerings, and lower net revenues in debt underwriting, primarily due to significantly lower net revenues from leveraged finance transactions.

 

The firm’s investment banking transaction backlog (3) decreased compared with the end of 2018.

    

 

Investment Banking

 

   

 

$1.81 billion

 

 

  

  

Financial Advisory

  

$887 million  

   

Underwriting

 

  

$923 million  

 

     
     
     
     
     
     
     
     
     
     

 

 

 

  

 

    Institutional Client Services  

 

  

 

  

 

Net revenues in Institutional Client Services were $3.61 billion for the first quarter of 2019, 18% lower than the first quarter of 2018 and 49% higher than the fourth quarter of 2018.

 

Net revenues in Fixed Income, Currency and Commodities (FICC) Client Execution were $1.84 billion, 11% lower than the first quarter of 2018, reflecting lower net revenues in interest rate products, currencies and credit products, partially offset by higher net revenues in mortgages and commodities. During the quarter, FICC Client Execution operated in an environment characterized by improved market conditions compared with the fourth quarter of 2018, while levels of volatility were lower and client activity remained low.

 

Net revenues in Equities were $1.77 billion, 24% lower than the first quarter of 2018, primarily due to significantly lower net revenues in equities client execution, particularly in derivatives, compared with a strong prior year period. In addition, commissions and fees were lower, reflecting lower market volumes, and net revenues in securities services were lower, primarily reflecting lower average customer balances. During the quarter, Equities operated in an environment characterized by improved market conditions, however client activity and levels of volatility were both lower compared with the fourth quarter of 2018.

  

  

  

 

Institutional Client Services

 

   

 

$3.61 billion

 

   

FICC

  

$1.84 billion  

   

Equities

 

  

$1.77 billion  

 

     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     

3      

 

Goldman Sachs Reports

First Quarter 2019 Earnings Results

 

 

      

 

    Investing & Lending  

 

       

 

Net revenues in Investing & Lending were $1.84 billion for the first quarter of 2019, 14% lower than the first quarter of 2018 and 4% lower than the fourth quarter of 2018.

 

Net revenues in equity securities were $847 million, 21% lower than the first quarter of 2018, reflecting significantly lower net gains from investments in private equities, partially offset by significantly higher net gains from investments in public equities.

 

Net revenues in debt securities and loans were $990 million, 7% lower than the first quarter of 2018, reflecting significantly lower net gains from investments in debt instruments and significantly lower results on hedges related to relationship lending activities, partially offset by significantly higher net interest income. The first quarter of 2019 included net interest income of $835 million.

    

 

Investing & Lending

   

 

$1.84 billion

 

   

Equity Securities

   $847 million  
   

Debt Securities   and Loans

  

$990 million  

 

     
 

  

    
     
     
     
     
     

 

      

 

    Investment Management  

 

       

 

Net revenues in Investment Management were $1.56 billion for the first quarter of 2019, 12% lower than the first quarter of 2018 and 9% lower than the fourth quarter of 2018.

 

The decrease in net revenues compared with the first quarter of 2018 was due to significantly lower incentive fees and lower transaction revenues. Management and other fees were essentially unchanged compared with the first quarter of 2018, reflecting shifts in the mix of client assets and strategies, offset by higher average assets under supervision.

 

During the quarter, total assets under supervision (3) increased $57 billion to $1.60 trillion. Long-term assets under supervision increased $79 billion, including net market appreciation of $59 billion, primarily in equity assets, and net inflows of $20 billion, reflecting net inflows in fixed income assets. Liquidity products decreased $22 billion.

    

 

Investment Management

 

   

 

$1.56 billion

 

   

Management and   Other Fees

  

 

$1.33 billion  

   

Incentive Fees

Transaction   Revenues

  

$  58 million  

 

$165 million  

 

     
     
     
     
     
     

 

 

Provision for Credit Losses

 

Provision for credit losses was $224 million for the first quarter of 2019, compared with $44 million for the first quarter of 2018 and $222 million for the fourth quarter of 2018. Provision for credit losses for the first quarter of 2019 primarily reflected provisions related to the consumer loan portfolio.

       
 

 

Provision for Credit Losses

 

 

 

$224 million

 

 

 

4      

 

Goldman Sachs Reports

First Quarter 2019 Earnings Results

 

 

Operating Expenses

 

 

Operating expenses were $5.86 billion for the first quarter of 2019, 11% lower than the first quarter of 2018 and 14% higher than the fourth quarter of 2018. The firm’s efficiency ratio (3) for the first quarter of 2019 was 66.6%, compared with 65.6% for the first quarter of 2018.

  

 

  

 

Operating Expenses

 

 

 

$5.86 billion

 

 

 

The decrease in operating expenses compared with the first quarter of 2018 was due to significantly lower compensation and benefits expenses, reflecting a decline in operating performance. In addition, brokerage, clearing, exchange and distribution fees were lower, reflecting a decrease in activity levels. These decreases were partially offset by higher expenses for consolidated investments and technology, with the increases primarily in depreciation and amortization.

 

Net provisions for litigation and regulatory proceedings for the first quarter of 2019 were $37 million compared with $44 million for the first quarter of 2018.

 

Headcount decreased 2% during the first quarter of 2019.

 

  

 

Efficiency Ratio

 

 

 

66.6%

 

 
 
   
   
   
   
   
   
   

 

Provision for Taxes

 

 

The effective income tax rate for the first quarter of 2019 was 17.2%, up from the full year rate of 16.2% for 2018, which included a $487 million income tax benefit in 2018 related to the finalization of the impact of the Tax Cuts and Jobs Act, partially offset by permanent tax benefits in the first quarter of 2019.

  

 

  
 

 

Effective Tax Rate

 

 

 

17.2%

 

 
   
   

 

 

Other Matters

 

 

◾ On April 12, 2019, the Board of Directors of The Goldman Sachs Group, Inc. increased the quarterly dividend to $0.85 per common share from $0.80 per common share. The dividend will be paid on June 27, 2019 to common shareholders of record on May 30, 2019.

 

◾ During the quarter, the firm repurchased 6.3 million shares of common stock at an average cost per share of $197.08, for a total cost of $1.25 billion. (3)

 

◾ Global core liquid assets (3) averaged $234 billion (4) for the first quarter of 2019, compared with an average of $229 billion for the fourth quarter of 2018.

      

 

Declared Quarterly

Dividend Per Common Share

 

 

 

$0.85

 

 
 

 

Common Share Repurchases

 

 

 

6.3 million shares

for $1.25 billion

 

   
   

 

Average GCLA

 

   

 

$234 billion

 

5      

 

Goldman Sachs Reports

First Quarter 2019 Earnings Results

 

 

The Goldman Sachs Group, Inc. is a leading global investment banking, securities and investment management firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.

 

          

 

   Cautionary Note Regarding Forward-Looking Statements  

 

              

This press release 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 firm’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the firm’s control. It is possible that the firm’s actual results and financial condition may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. For information about some of the risks and important factors that could affect the firm’s future results and financial condition, see “Risk Factors” in Part I, Item 1A of the firm’s Annual Report on Form 10-K for the year ended December 31, 2018.

Information regarding the firm’s capital ratios, risk-weighted assets, supplementary leverage ratio, total assets and balance sheet data, global core liquid assets and VaR consists of preliminary estimates. These estimates are forward-looking statements and are subject to change, possibly materially, as the firm completes its financial statements.

Statements about the firm’s investment banking transaction backlog also may constitute forward-looking statements. Such statements are subject to the risk that the terms of these transactions may be modified or that they may not be completed at all; therefore, the net revenues, if any, that the firm actually earns from these transactions may differ, possibly materially, from those currently expected. Important factors that could result in a modification of the terms of a transaction or a transaction not being completed include, in the case of underwriting transactions, a decline or continued weakness in general economic conditions, outbreak of hostilities, volatility in the securities markets generally or an adverse development with respect to the issuer of the securities and, in the case of financial advisory transactions, a decline in the securities markets, an inability to obtain adequate financing, an adverse development with respect to a party to the transaction or a failure to obtain a required regulatory approval. For information about other important factors that could adversely affect the firm’s investment banking transactions, see “Risk Factors” in Part I, Item 1A of the firm’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

          

 

   Conference Call  

 

             

A conference call to discuss the firm’s financial results, outlook and related matters will be held at 9:00 am (ET). The call will be open to the public. Members of the public who would like to listen to the conference call should dial 1-888-281-7154 (in the U.S.) or 1-706-679-5627 (outside the U.S.). The number should be dialed at least 10 minutes prior to the start of the conference call. The conference call will also be accessible as an audio webcast through the Investor Relations section of the firm’s website, www.goldmansachs.com/investor-relations. There is no charge to access the call. For those unable to listen to the live broadcast, a replay will be available on the firm’s website or by dialing 1-855-859-2056 (in the U.S.)  or  1-404-537-3406 (outside the U.S.) passcode number 64774224 beginning approximately three hours after the event. Please direct any questions regarding obtaining access to the conference call to Goldman Sachs Investor Relations, via e-mail, at gs-investor-relations@gs.com.

6        

 

Goldman Sachs Reports

First Quarter 2019 Earnings Results

 

The Goldman Sachs Group, Inc. and Subsidiaries

Segment Net Revenues (unaudited)

$ in millions

 

     
     THREE MONTHS ENDED           % CHANGE FROM  
       
     MARCH 31,
2019		     DECEMBER 31,
2018		     MARCH 31,
2018		              DECEMBER 31,
2018		     MARCH 31,
2018		  

 

INVESTMENT BANKING

 

                                          

 

Financial Advisory

     $         887         $             1,201         $        586           (26) %       51 %  
                 

Equity underwriting

     271         315         410           (14)           (34)      

 

Debt underwriting

 

    

 

 652  

 

  

 

    

 

 528  

 

  

 

    

 

 797  

 

  

 

      

 

 23     

 

  

 

    

 

 (18)    

 

  

 

 

Total Underwriting

 

    

 

 923  

 

  

 

    

 

 843  

 

  

 

    

 

 1,207  

 

  

 

      

 

 9     

 

  

 

    

 

 (24)    

 

  

 

                 

 

Total Investment Banking

 

    

 

 1,810  

 

  

 

    

 

 2,044  

 

  

 

    

 

 1,793  

 

  

 

      

 

 (11)    

 

  

 

    

 

 1     

 

  

 

                 

 

INSTITUTIONAL CLIENT SERVICES

 

                                          

FICC Client Execution

     1,839         822         2,074           124           (11)      
                 

Equities client execution

     682         401         1,062           70            (36)      

 

Commissions and fees

     714         801         817           (11)           (13)      

 

Securities services

 

    

 

 370  

 

  

 

    

 

 402  

 

  

 

    

 

 432  

 

  

 

      

 

 (8)    

 

  

 

    

 

 (14)    

 

  

 

 

Total Equities

 

    

 

 1,766  

 

  

 

    

 

 1,604  

 

  

 

    

 

 2,311  

 

  

 

      

 

 10     

 

  

 

    

 

 (24)    

 

  

 

                 

 

Total Institutional Client Services

 

    

 

 3,605  

 

  

 

    

 

 2,426  

 

  

 

    

 

 4,385  

 

  

 

      

 

 49     

 

  

 

    

 

 (18)    

 

  

 

                 

 

INVESTING & LENDING

 

                                          

 

Equity securities

     847         994         1,069           (15)           (21)      

 

Debt securities and loans

 

    

 

 990  

 

  

 

    

 

 912  

 

  

 

    

 

 1,062  

 

  

 

      

 

 9     

 

  

 

    

 

 (7)    

 

  

 

 

Total Investing & Lending

 

    

 

 1,837  

 

  

 

    

 

 1,906  

 

  

 

    

 

 2,131  

 

  

 

      

 

 (4)    

 

  

 

    

 

 (14)    

 

  

 

                 

 

INVESTMENT MANAGEMENT

 

                                          

 

Management and other fees

     1,332         1,365         1,346           (2)           (1)      

 

Incentive fees

     58         153         213           (62)           (73)      

 

Transaction revenues

 

    

 

 165  

 

  

 

    

 

 186  

 

  

 

    

 

 212  

 

  

 

      

 

 (11)    

 

  

 

    

 

 (22)    

 

  

 

 

Total Investment Management

 

    

 

 1,555  

 

  

 

    

 

 1,704  

 

  

 

    

 

 1,771  

 

  

 

      

 

 (9)    

 

  

 

    

 

 (12)    

 

  

 

                 

 

Total net revenues (5)

 

    

 

 $     8,807  

 

  

 

    

 

 $             8,080  

 

  

 

    

 

 $  10,080  

 

  

 

      

 

 9     

 

  

 

    

 

 (13)    

 

  

 

 

Geographic Net Revenues (unaudited) (3)

$ in millions

 

            
   
     THREE MONTHS ENDED                    
   
     MARCH 31,
2019		     DECEMBER 31,
2018		     MARCH 31,
2018		                    

Americas

     $     5,245         $             5,178         $    5,941          

 

EMEA

     2,459         1,766         2,590          

 

Asia

 

    

 

 1,103  

 

  

 

    

 

 1,136  

 

  

 

    

 

 1,549  

 

  

 

      

 

Total net revenues (5)

 

    

 

 $     8,807  

 

  

 

    

 

 $             8,080  

 

  

 

    

 

 $  10,080  

 

  

 

      
               

Americas

     60%       64%       59%        

 

EMEA

     28%       22%       26%        

 

Asia

 

    

 

 12%

 

  

 

    

 

 14%

 

  

 

    

 

 15%

 

  

 

      

 

Total

 

    

 

 100%

 

  

 

    

 

 100%

 

  

 

    

 

 100%

 

  

 

      

 

7

Goldman Sachs Reports

First Quarter 2019 Earnings Results

 

The Goldman Sachs Group, Inc. and Subsidiaries

Consolidated Statements of Earnings (unaudited) (5)

In millions, except per share amounts and headcount

 

     
     THREE MONTHS ENDED         % CHANGE FROM  
       
     MARCH 31,
2019		     DECEMBER 31,
2018		     MARCH 31,
2018		            DECEMBER 31,
2018		     MARCH 31,
2018		  

 

REVENUES

 

                                          

 

Investment banking

     $       1,810       $             2,044       $       1,793         (11) %       1  %  

 

Investment management

     1,433       1,567       1,639         (9)           (13)      

 

Commissions and fees

     743       838       862         (11)           (14)      

 

Market making

     2,539       1,420       3,204         79            (21)      

 

Other principal transactions

 

    

 

 1,064

 

  

 

    

 

 1,220

 

  

 

    

 

 1,664

 

  

 

      

 

 (13)    

 

  

 

    

 

 (36)    

 

  

 

 

Total non-interest revenues

 

    

 

 7,589

 

  

 

    

 

 7,089

 

  

 

    

 

 9,162

 

  

 

      

 

 7     

 

  

 

    

 

 (17)    

 

  

 

                 

Interest income

     5,597       5,468       4,230         2            32       

 

Interest expense

 

    

 

 4,379

 

  

 

    

 

 4,477

 

  

 

    

 

 3,312

 

  

 

      

 

 (2)    

 

  

 

    

 

 32     

 

  

 

 

Net interest income

 

    

 

 1,218

 

  

 

    

 

 991

 

  

 

    

 

 918

 

  

 

      

 

 23     

 

  

 

    

 

 33     

 

  

 

                 

 

Total net revenues

 

    

 

 8,807

 

  

 

    

 

 8,080

 

  

 

    

 

 10,080

 

  

 

      

 

 9     

 

  

 

    

 

 (13)    

 

  

 

                 

 

Provision for credit losses

 

    

 

 224

 

  

 

    

 

 222

 

  

 

    

 

 44

 

  

 

      

 

 1     

 

  

 

    

 

 N.M.    

 

  

 

                 

 

OPERATING EXPENSES

 

                                          

 

Compensation and benefits

     3,259       1,857       4,057         75            (20)      

 

Brokerage, clearing, exchange and distribution fees

     762       830       844         (8)           (10)      

 

Market development

     184       208       182         (12)           1       

 

Communications and technology

     286       262       251         9            14       

 

Depreciation and amortization

     368       377       299         (2)           23       

 

Occupancy

     225       215       194         5            16       

 

Professional fees

     298       317       293         (6)           2       

 

Other expenses

 

    

 

 482

 

  

 

    

 

 1,084

 

  

 

    

 

 497

 

  

 

      

 

 (56)    

 

  

 

    

 

 (3)    

 

  

 

 

Total operating expenses

 

    

 

 5,864

 

  

 

    

 

 5,150

 

  

 

    

 

 6,617

 

  

 

      

 

 14     

 

  

 

    

 

 (11)    

 

  

 

                 

Pre-tax earnings

     2,719       2,708       3,419         –            (20)      

 

Provision for taxes

 

    

 

 468

 

  

 

    

 

 170

 

  

 

    

 

 587

 

  

 

      

 

 175     

 

  

 

    

 

 (20)    

 

  

 

 

Net earnings

 

    

 

 2,251

 

  

 

    

 

 2,538

 

  

 

    

 

 2,832

 

  

 

      

 

 (11)    

 

  

 

    

 

 (21)    

 

  

 

Preferred stock dividends

 

    

 

 69

 

  

 

    

 

 216

 

  

 

    

 

 95

 

  

 

      

 

 (68)    

 

  

 

    

 

 (27)    

 

  

 

 

Net earnings applicable to common shareholders

 

    

 

 $       2,182

 

  

 

    

 

 $         2,322

 

  

 

    

 

 $       2,737

 

  

 

      

 

 (6)    

 

  

 

    

 

 (20)    

 

  

 

                 

 

EARNINGS PER COMMON SHARE

 

                                          

 

Basic (3)

     $         5.73       $               6.11       $         7.02         (6) %       (18) %  

 

Diluted

     5.71       6.04       6.95         (5)           (18)      
                 

 

AVERAGE COMMON SHARES

 

                                          

 

Basic

     379.8       379.5       389.1         –            (2)      

 

Diluted

     382.4       384.3       393.8         –            (3)      
                 

 

SELECTED DATA AT PERIOD-END

 

                                          

 

Basic shares (3)

     378.2       380.9       387.6         (1)           (2)      

 

Book value per common share

     $     209.07       $     207.36       $     186.73         1            12       

 

Tangible book value per common share (1)

     198.25       196.64       176.28         1            12       
                 

Headcount

 

    

 

 35,900

 

  

 

    

 

 36,600

 

  

 

    

 

 34,000

 

  

 

      

 

 (2)    

 

  

 

    

 

 6     

 

  

 

 

8

Goldman Sachs Reports

First Quarter 2019 Earnings Results

 

The Goldman Sachs Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Financial Condition (unaudited) (4)

$ in billions

 

   
     AS OF                  
   
     MARCH 31,
2019		     DECEMBER 31,
2018		                                                                                                                         

 

ASSETS

 

                      

 

Cash and cash equivalents

     $           88         $               131          

 

Collateralized agreements

     280         274          

 

Receivables

     156         160          

 

Financial instruments owned

     363         336          

 

Other assets

 

    

 

 38  

 

  

 

    

 

 31  

 

  

 

      

 

Total assets

 

    

 

 $         925  

 

  

 

    

 

 $               932  

 

  

 

      
             

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

                      

 

Deposits

     $         164         $               158          

 

Collateralized financings

     103         112          

 

Payables

     181         180          

 

Financial instruments sold, but not yet purchased

     101         109          

 

Unsecured short-term borrowings

     45         41          

 

Unsecured long-term borrowings

     225         224          

 

Other liabilities

 

    

 

 16  

 

  

 

    

 

 18  

 

  

 

      

 

Total liabilities

 

    

 

 835  

 

  

 

    

 

 842  

 

  

 

      

 

Shareholders’ equity

 

    

 

 90  

 

  

 

    

 

 90  

 

  

 

      

 

Total liabilities and shareholders’ equity

 

    

 

 $         925  

 

  

 

    

 

 $               932  

 

  

 

      

 

Capital Ratios and Supplementary Leverage Ratio (unaudited) (3) (4)

$ in billions

 

    
   
     AS OF                  
   
     MARCH 31,
2019		     DECEMBER 31,
2018		                  

 

Common equity tier 1

     $        74.7         $              73.1          
             

 

STANDARDIZED CAPITAL RULES

 

                      

 

Risk-weighted assets

     $         544         $               548          

 

Common equity tier 1 ratio

     13.7%       13.3%        
             

 

BASEL III ADVANCED CAPITAL RULES

 

                      

 

Risk-weighted assets

     $         557         $               558          

 

Common equity tier 1 ratio

     13.4%       13.1%        
             

Supplementary leverage ratio

 

    

 

 6.4%

 

  

 

    

 

 6.2%

 

  

 

      

 

Average Daily VaR (unaudited) (3) (4)

$ in millions

 

          
   
     THREE MONTHS ENDED                  
   
     MARCH 31,
2019		     DECEMBER 31,
2018		                  

 

RISK CATEGORIES

 

                      

 

Interest rates

     $           43         $                 40          

 

Equity prices

     29         28          

 

Currency rates

     12         19          

 

Commodity prices

     11         12          

 

Diversification effect

 

    

 

 (40) 

 

  

 

    

 

 (50) 

 

  

 

      

 

Total

 

    

 

 $           55  

 

  

 

    

 

 $                 49  

 

  

 

      

 

9

Goldman Sachs Reports

First Quarter 2019 Earnings Results

 

The Goldman Sachs Group, Inc. and Subsidiaries

Assets Under Supervision (unaudited) (3)

$ in billions

 

   
     AS OF                  
   
     MARCH 31,
2019		     DECEMBER 31,
2018		     MARCH 31,
2018		                                                                                                                         

 

ASSET CLASS

 

                              

 

Alternative investments

     $           172        $               167        $           168         

 

Equity

     335        301        322         

 

Fixed income

 

    

 

 717 

 

  

 

    

 

 677 

 

  

 

    

 

 668 

 

  

 

      

 

Total long-term AUS

 

    

 

 1,224 

 

  

 

    

 

 1,145 

 

  

 

    

 

 1,158 

 

  

 

      

 

Liquidity products

 

    

 

 375 

 

  

 

    

 

 397 

 

  

 

    

 

 340 

 

  

 

      

 

Total AUS

 

    

 

 $        1,599 

 

  

 

    

 

 $            1,542 

 

  

 

    

 

 $        1,498 

 

  

 

      
           
   
     THREE MONTHS ENDED                  
   
     MARCH 31,
2019		     DECEMBER 31,
2018		     MARCH 31,
2018		                  

 

Beginning balance

     $        1,542        $            1,550        $        1,494         

 

Net inflows / (outflows):

              

 

Alternative investments

     1        (4)       (1)        

 

Equity

     (1)       (1)       5         

 

Fixed income

 

    

 

 20 

 

  

 

    

 

 8 

 

  

 

    

 

 9 

 

  

 

      

 

Total long-term AUS net inflows / (outflows)

 

    

 

 20 

 

  

 

    

 

 3 

 

  

 

    

 

 13 

 

  

 

      

 

Liquidity products

 

    

 

 (22)

 

  

 

    

 

 39 

 

  

 

    

 

 (5)

 

  

 

      

 

Total AUS net inflows / (outflows)

 

    

 

 (2)

 

  

 

    

 

 42 

 

  

 

    

 

 8 

 

  

 

      

 

Net market appreciation / (depreciation)

 

    

 

 59 

 

  

 

    

 

 (50)

 

  

 

    

 

 (4)

 

  

 

      

 

Ending balance

 

    

 

 $        1,599 

 

  

 

    

 

 $            1,542 

 

  

 

    

 

 $        1,498 

 

  

 

      

 

10

Goldman Sachs Reports

First Quarter 2019 Earnings Results

 

 

Footnotes

    

 

  (1)

Annualized 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 preferred stock, goodwill and identifiable intangible assets. Annualized ROTE is calculated by dividing annualized net earnings applicable to common shareholders by average monthly tangible common shareholders’ equity. Tangible book value per common share (TBVPS) is calculated by dividing tangible common shareholders’ equity by basic shares. Management believes that tangible common shareholders’ equity and TBVPS are meaningful because they are measures that the firm and investors use to assess capital adequacy and that ROTE is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed internally. Tangible common shareholders’ equity, ROTE and TBVPS are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies.

 

The table below presents the firm’s average and ending equity, as well as a reconciliation of average and ending common shareholders’ equity to tangible common shareholders’ equity:

 

   
Unaudited, $ in millions   AVERAGE FOR THE
 THREE MONTHS ENDED 
MARCH 31, 2019		     AS OF
 MARCH 31, 2019 		     AS OF
 DECEMBER 31, 2018 		     AS OF
 MARCH 31, 2018 		               

 

Total shareholders’ equity

 

     $            89,628        $            90,273        $            90,185        $            83,579     

Preferred stock

     (11,203)       (11,203)       (11,203)       (11,203)    

 

Common shareholders’ equity

  

 

 

 

78,425 

 

 

  

 

 

 

79,070 

 

 

  

 

 

 

78,982 

 

 

  

 

 

 

72,376 

 

 

  

 

Goodwill and identifiable intangible assets

     (4,096)       (4,092)       (4,082)       (4,049)    

 

Tangible common shareholders’ equity

  

 

 

 

$            74,329 

 

 

  

 

 

 

$            74,978 

 

 

  

 

 

 

$            74,900 

 

 

  

 

 

 

$            68,327 

 

 

  

 

  (2)

Dealogic – January 1, 2019 through March 31, 2019.

 

  (3)

For information about the following items, see the referenced sections in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the firm’s Annual Report on Form 10-K for the year ended December 31, 2018: (i) investment banking transaction backlog – see “Results of Operations – Investment Banking” (ii) assets under supervision – see “Results of Operations – Investment Management” (iii) efficiency ratio – see “Results of Operations – Operating Expenses” (iv) share repurchase program – see “Equity Capital Management and Regulatory Capital – Equity Capital Management” (v) global core liquid assets – see “Risk Management – Liquidity Risk Management” (vi) basic shares – see “Balance Sheet and Funding Sources – Balance Sheet Analysis and Metrics” and (vii) VaR – see “Risk Management – Market Risk Management.”

 

For information about the following items, see the referenced sections in Part II, Item 8 “Financial Statements and Supplementary Data” in the firm’s Annual Report on Form 10-K for the year ended December 31, 2018: (i) risk-based capital ratios and supplementary leverage ratio – see Note 20 “Regulation and Capital Adequacy” (ii) geographic net revenues – see Note 25 “Business Segments” and (iii) unvested share-based awards that have non-forfeitable rights to dividends or dividend equivalents in calculating basic EPS – see Note 21 “Earnings Per Common Share.”

 

  (4)

Represents a preliminary estimate and may be revised in the firm’s Quarterly Report on Form 10-Q for the period ended March 31, 2019.

 

 

  (5)

The following reclassifications have been made to previously reported amounts for the first quarter of 2018 to conform to the current presentation:

 

 

  •  

Provision for credit losses, previously reported in other principal transactions revenues (and Investing & Lending segment net revenues), is now reported as a separate line item in the Consolidated Statements of Earnings.

 

 

  •  

Headcount consists of the firm’s employees, and excludes consultants and temporary staff previously reported as part of total staff. As a result, expenses related to these consultants and temporary staff are now reported in professional fees. Previously such amounts were reported in compensation and benefits.

 

11