Goldman Sachs Group, Inc. (The)

Good morning. My name is Jamaria and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs fourth quarter 2021 earnings conference call. This call is being recorded today, January 18th, 2022. Thank you, Ms. Halio. You may begin your conference.

Good morning. This is Carrie Halio, head of investor relations at Goldman Sachs. Welcome to our fourth 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 information on forward-looking statements and non-GAAP measures appear on the earnings release and presentation. This audio cast is copyrighted material of the Goldman Sachs Group, Inc. and may not be duplicated, reproduced, or rebroadcast without our consent. I am joined by our chairman and chief executive officer, David Solomon, and our Chief Financial Officer, Dennis Coleman. Let me now pass the call to David.

Thank you, Carrie, and good morning, everybody. Thank you all for joining us. Goldman Sachs delivered record results in 2021, and I am extremely pleased with our performance. We generated record full-year revenues of $59 billion and record net earnings of $21.6 billion, over 60% greater than the previous all-time high. While our results were supported by a healthy operating environment, We delivered the highest annual return among our peer set with an ROE of 23%. Our record annual revenues demonstrate that our client-oriented strategy is working. Investment banking had an extraordinary year as clients remained incredibly active and turned to Goldman Sachs time and time again for our industry-leading M&A and capital markets advice and execution. In this business, where we have been the dominant M&A advisor over the last 25 years, we produced segment revenues that exceeded the previous record by over $5 billion. In global markets, we have set out to make this business more client-oriented and to improve its return profile. We've made great progress, and we now rank in the top three with 72 of the top 100 clients, up from 51 in 2019. And we generated a return of 15% for the year. Our asset management and wealth management business both had record years. We are advancing our strategy to expand our third-party alternatives platform We are a top five alternative asset manager globally. In the last two years, we have raised over $100 billion in commitments against our five-year goal of $150 billion. We are keenly focused on growing this business and will be updating our long-term goals. We are also proud to run the fifth largest active asset manager globally with assets under supervision of a record $2.5 trillion. During the year, we generated a record $130 billion in long-term net inflows across the platform. Despite our strong market position and inflows, we are on a path to grow our asset management and wealth management businesses further and drive higher fee-related revenues. Finally, I continue to be excited by our creation of the consumer banking platform of the future, where we are enabling over 10 million customers to take control of their financial lives. Last week, we introduced My GM Rewards Card, And we look forward to the addition of green sky later this quarter and the launch of checking later this year. At our investor day in early 2020, we committed to do three things. Grow and strengthen our existing businesses, diversify our franchise into new businesses and operate more efficiently. As shown by today's results, we are delivering on these objectives underpinned by our relentless focus on our clients. Notwithstanding the solid progress we've made to date, we remain committed to driving this organization forward with a keen eye on growth and diversifying our business mix. These efforts will strengthen our ability to elevate the firm's return profile relative to before we took over as a leadership team. As I look ahead, we have great opportunities to grow the firm as we scale our four growth initiatives. We invested in these initiatives with the belief that each of them has the potential to add tens of billions of dollars to our market cap over time. Given it has now been two years since our investor day, we plan to address the details of the next phase of our execution next month. Before I turn it over to Dennis, let me provide some thoughts on the operating environment. I'll start by saying there continues to be a fair amount of uncertainty. There's no question that the recent surge in Omicron cases contributed to market volatility. However, I am encouraged by data that shows that Omicron wave is less severe and has already peaked in some countries. Therefore, it is expected to have less of an economic impact. My view is that COVID-19 will be endemic, and as a society, we will find a way to live with it, supported by the efficacy of vaccines and new treatments. For our firm, this means being flexible and dynamic with our protocols to adapt to this new state of the world, while also enabling the majority of our people to be back in the office safely. More broadly, there's no surprise that the recent surge in cases is putting even more pressure on supply chains. Inflation is persisting in many countries, and major central banks are beginning to raise rates. Notably, the Bank of England late last year and the Federal Reserve is now expected by our economists to implement four rate hikes in 2022. Based on my experience, it makes sense that coming out of the recent period of easy monetary policy, inflation may be above trend for some time. And in the near term, inflationary pressures may continue to intensify before they start to decrease. I also believe that we could see more volatility as these easing policies are unwound, which will likely have an impact on economic growth, asset prices, and client activity. In such a dynamic environment, I want to reiterate the importance I place on investing in the people of Goldman Sachs. It is their tireless dedication to the firm, to our clients, and our culture of collaboration that drove our record performance this year. And I want to take this opportunity to express my profound thanks for all their hard work. It remains a personal priority of mine that we invest in their success. In 2021, we demonstrated this commitment not only through our pay for performance approach, but also by supporting our people in a variety of other ways, including new benefits and investments in health and safety. We believe these investments are critical components of our people strategy, support our culture, and position us for success in the long term. In conclusion, as I said at the outset, we had a very favorable backdrop in 2021, and we outperformed. But make no mistake, as we move into 2022 with excitement and enthusiasm for the opportunities ahead, we remain committed to executing on our strategy and delivering for our shareholders in any market environment. Let me now turn it over to Dennis to cover our financial results for the year and the quarter in more detail.