Goldman Sachs Group, Inc. (The)

Good morning. My name is Erica, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs first quarter 2022 earnings conference call. This call is being recorded today, April 14, 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 first 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.gf.com. No 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 pass the call to David.

Thanks, Kerry. Good morning, everyone. Thank you all for joining us this morning. There's no question the first quarter was extremely volatile. Russia invaded Ukraine, inflation rose across the globe, and we saw an accelerating trend towards deglobalization. In recent decades, we've grown used to low inflation, low interest rates, and the free flow of people and goods across national borders. I believe we're entering a period that that won't be the case, and the consequences for financial markets will be meaningful. Although much remains uncertain, I'm proud that Goldman Sachs effectively supported its clients in this type of environment. This is a testament to the progress we've made to center our strategy around clients. At a time of great volatility, it was clear our clients needed help managing their risk, and they turned to us for our expertise in navigating this changing landscape. The recent turbulence does nothing to change our firm's client-oriented strategies. In fact, it makes it all the more imperative. We are building a more resilient, diversified franchise that can generate solid returns even in more uncertain markets. In February, I laid out our revised medium-term return targets. I'm very proud that, even with the headwinds we faced, our results this quarter meet those objectives. We are also well-positioned to achieve the targets we laid out for our growth initiatives across asset management, wealth management, transaction banking, and consumer. In some areas, we have accelerated our progress in the acquisitions, including Green Sky, which closed in late March, and NNIP, which closed earlier this week. I'm thrilled to be welcoming these great businesses to Goldman Sachs. For the quarter, we produced net revenues of $12.9 billion and generated earnings per share of $10.76%, an ROE of 15%, and an ROTE of 15.8%. As I noted, the evolving market backdrop had a significant effect on client activity. This meant that some parts of our firm faced significant headwinds, like equity capital markets, where issuance volumes were lackluster for the quarter. On the other hand, global markets had a strong quarter, as this environment allowed us to support clients in the risk intermediation and financing needs. And in line with our strategy, several of our growth areas continued to reflect durability despite the difficult environment. For example, we saw solid management and other fees across asset management, wealth management, as well as revenue growth in our consumer business. But there's no question that the most significant event of the first quarter was the invasion of Ukraine. As I've said before, we condemn the invasion on the strongest possible terms, and our hearts go out to the Ukrainian people. This act of aggression demands a response, and Goldman Sachs is committed to doing its part. Early on, we took action to ensure the well-being of our people and to begin winding down our firm's operations in Russia. That process is ongoing. Let me also say a few words on our direct financial exposure to Russia. Our positions were relatively limited, but we've been focused on closing them out and reducing our exposure. The overall direct financial impact from Russia and Ukraine-related instruments on our first quarter revenues was a net loss of approximately $300 million. Our risk mitigation efforts would not have been possible without the close collaboration of our people around the globe on both the business and the control side of our firm. Our risk management culture is a true differentiator for us, and we continue to navigate as we continue to navigate this volatile environment. More broadly, the Russian invasion has further complicated the geopolitical landscape and created an additional level of uncertainty that I expect will outlast the war itself. While it is encouraging to see newfound unity among the Western democracies, The trend towards de-globalization is clearly gaining momentum. The consequences of that shift are likely to be significant and long-lasting, and I believe it will take some time to fully appreciate all the second and third order ramifications. Beyond geopolitics, I'm keeping a close eye on several other trends. While U.S. unemployment levels are low and wages are increasing, inflation is the highest it's been in decades. We're seeing new stress on supply chains and commodity prices, and U.S. households are are facing rising gas prices as well as higher prices for food and housing. We're also seeing an increased risk of stagflation and mixed signals on consumer confidence. These cross-currents will certainly create ongoing complexity in the economic outlook, but whatever the future holds, I believe Goldman Sachs is well positioned. We continue to make progress on our growth strategy, and our commitment to clients is stronger than ever. I'll now turn it over to Dennis to cover our financial results for the quarter in more detail. Thank you, David.