Detailed Narrative
Strategic Evolution and Performance Since 2020 Investor Day
Since its 2020 Investor Day, Goldman Sachs has significantly grown and strengthened the firm, increasing firm-wide revenues by roughly 60% and EPS by 144%. Returns improved by 500 basis points, and total shareholder return exceeded 340%. The firm has materially improved its risk profile by doubling more durable revenues and reducing historical principal investments by over 90% to $6 billion, leading to a 320 basis point improvement in its stress capital buffer.
Global Banking & Markets Sustains Leadership and Growth
Global Banking & Markets (GBM) achieved record revenues of $41.5 billion for FY25, up 18% year-over-year. The firm maintained its #1 position in M&A advisory for 23 consecutive years and holds leading positions in FICC and equities. The investment banking backlog reached a 4-year high, driven by advisory, indicating strong future activity. Financing revenues within FICC and equities grew at a 17% CAGR since 2021, now comprising 37% of total FICC and equity revenues, providing a more durable revenue stream.
Asset & Wealth Management Sets Higher Targets and Expands Offerings
The Asset & Wealth Management (AWM) segment manages $3.6 trillion in assets under supervision, with management and other fees and private banking and lending revenues growing at a 12% CAGR. The firm is raising its AWM pretax margin target to 30% and expects high-teen returns over the medium term⏳. New targets include 5% annual long-term fee-based net inflows in wealth management and raising $75 billion to $100 billion annually in alternatives fundraising, with fee-paying alternative AUS projected to reach $750 billion by 2030.
Prudent Capital Management and Shareholder Returns
Goldman Sachs maintains a disciplined capital management philosophy, prioritizing investments in client franchises, sustainably growing its dividend, and returning excess capital to shareholders. The firm announced a $0.50 increase in its quarterly dividend to $4.50, a 50% increase year-over-year, and has $32 billion in remaining buyback capacity. Deposits grew to $501 billion, representing 40% of total funding, enhancing funding diversification and financial flexibility.
One Goldman Sachs 3.0 and AI-Driven Efficiency
The firm launched One Goldman Sachs 3.0, a new operating model propelled by AI, focusing on 6 initial workstreams for efficiency improvements. This initiative aims to drive productivity and reengineer processes, freeing up capacity to invest in growth areas. While early in its implementation, management expects meaningful and significant efficiency gains, with plans to provide more detailed metrics and progress updates in future quarters.
Strategic Narrowing of Focus: Apple Card Transition
Goldman Sachs is taking final steps to narrow its strategic focus, including the transition of the Apple Card portfolio. This transition had a net positive impact of $0.46 to EPS and 50 basis points to ROE in Q4 due to a $2.5 billion reserve release, despite a $2.3 billion revenue reduction. The firm will continue to service existing Apple savings customers, with no current agreement to transition the savings program, which remains attractive to the firm.