Detailed narrative
Record Performance & Market Tailwinds
Goldman Sachs achieved record Q2 FY26 revenues of $20.3 billion and EPS of $20.98, with ROE of 23.5% and ROTE of 25.5%. This performance was attributed to a strong operating environment, significant strategic deal-making activity (large-cap M&A volumes up 90% H1 2026), and the expanding AI investment cycle driving capital needs across various industries.
The firm's global franchise and "One Goldman Sachs" approach were key enablers.
Investment Banking Momentum & Backlog
The firm expanded its lead as the #1 M&A adviser, crossing $1 trillion in announced volumes over a 6-month period for the first time. Advisory revenues rose 17% YoY, equity underwriting was up 130% YoY, and debt underwriting revenues were up 75% YoY, marking a record quarter.
The investment banking backlog increased to its highest level in 5 years, underpinned by a record advisory backlog, indicating continued strong client engagement.
Equities & FICC Strength
Equities generated record revenues of $7.4 billion, with intermediation up 60% YoY and financing up 91% YoY, driven by strong activity in Asia and record average prime balances. FICC net revenues were $4.6 billion, up 32% YoY, with broad-based strength in intermediation (interest rates, commodities) and financing (mortgages, structured lending). The firm's multi-year investments in these areas, particularly in Asia, contributed to market share gains.
Asset & Wealth Management Growth
Asset & Wealth Management revenues increased 20% YoY to $4.6 billion, with management and other fees up 20% YoY to a record $3.4 billion. The firm achieved its 34th consecutive quarter of long-term net inflows, including $19 billion in Wealth Management, and recorded $59 billion in alternatives fundraising for the quarter.
Total assets under supervision reached a record $4 trillion, with wealth management client assets at $2 trillion.
Capital Management & Shareholder Returns
Goldman Sachs maintained a strong CET1 ratio of 12.9%, 150 basis points above its 11.4% requirement. The firm announced a 25% increase in its quarterly dividend to $5 per share and repurchased $4 billion of common stock in the quarter. Management emphasized a disciplined approach to capital allocation, prioritizing client support and accretive returns, with excess capital returned to shareholders.
AI Investment Cycle & Firm Strategy
The AI build-out cycle is seen as being in its early stages, expected to drive elevated strategic activity, financing, and capital formation for years. Goldman Sachs aims to leverage its global breadth, talent, and engineering capabilities to capitalize on this opportunity. Internally, AI is viewed as a transformational technology to enhance employee productivity and client service, with ongoing investments in technology and talent.
One Goldman Sachs & Client Engagement
The "One Goldman Sachs" operating ethos is creating a multiplier effect, with advisory relationships leading to opportunities across Capital Solutions, financing, risk management, capital markets, and Asset & Wealth Management. The firm noted nearly 900 referrals to wealth management from investment banking since early 2025, demonstrating enhanced connectivity and integrated client service.
Expense Management & Efficiency
Total operating expenses were $11.7 billion, with a first-half efficiency ratio of 58.8%, an improvement of 320 basis points YoY. This was achieved despite increased transaction-based expenses, reflecting disciplined expense management and operating leverage from strong revenue growth. The firm is focused on scaling and automating platforms to support client activity without proportionally increasing human capital footprint.