Goldman Sachs Group, Inc. (The)

Good morning. My name is Katie and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs second quarter 2023 earnings conference call. This call is being recorded today, July 19th, 2023. Thank you. Ms. Halio, you may begin your conference.

Thank you. Good morning. This is Carrie Halio, head of investor relations and chief strategy officer at Goldman Sachs. Welcome to our second 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'm joined today by our Chairman and Chief Executive Officer, David Solomon, and our Chief Financial Officer, Dennis Coleman. Let me pass the call to David.

Thank you, Carrie, and good morning, everyone. Thank you all for joining us. This quarter, we produced net revenues of $10.9 billion and generated earnings per share of $3.08, an ROE of 4%, and an ROTE of 4.4%. Our results were impacted by several items related to businesses where executing on a strategic transition and positioning the firm for the future. In particular, shifting our asset and wealth management business to a less capital-intensive model and the pivot to narrow our consumer ambitions. All in, these items reduced our EPS for the second quarter by $3.95 and our ROE by 5.2 percentage points. Our results were also impacted by the challenging macro environment, and in particular, headwinds facing our specific mix of businesses. Activity levels in many areas of investment banking hover near decade-long lows, and clients largely maintained a risk-off posture over the course of the quarter. CEOs around the world continue to be cautious as businesses grapple with persistent inflation, geopolitical tensions, and slower growth. But we know that corporate activity and capital formation are core to our financial system, and there are a number of structural catalysts that should lead to increased levels of activity. And we're seeing it begin to pick up in a few spots already, particularly equity capital markets and M&A dialogue. There's no question recent economic data in the U.S. indicates the Fed's efforts to fight inflation are showing progress. and we are starting to see more optimism about the forward trajectory. However the year unfolds, we stand ready to help our clients navigate the evolving backdrop while maintaining a prudent risk posture and operating the firm more efficiently. Importantly, we laid out a clear set of strategic goals at our investor day in February, and we are in execution mode. We have two incredibly strong client franchises, a world-class global banking and markets business, where we continue to deliver solid returns even in an environment with reduced activity levels, and a scaled asset and wealth management platform that continues to show very strong underlying trends aligned with our investor day goals with growth and more recurring revenues of management and other fees and private banking and lending. These businesses are supported by a number of things. First, a long track record of serving the world's leading businesses, institutions, and individuals. Building relationships as a trusted advisor is core to what Goldman Sachs does. Next, a client-centric mindset. Over the last five years, we have strengthened our efforts to bring to bear the best of the firm's capabilities and holistically serve clients with our one Goldman Sachs operating ethos. Client feedback continues to be highly encouraging, and we see opportunities to make further gains. We also have a global, broad, and deep platform with capabilities that span across products, geographies, and solutions, a key differentiator of value for our clients around the world. We have exceptional people. They are differentiated and they work hard to make a difference for our clients. And lastly, this is all underpinned by a culture of collaboration and excellence. We are also pleased that our strategy to reduce the capital intensity of our business is resulting in sustained multi-year progress. Starting in October, our SCB will be reduced by 80 basis points to 5.5%, giving us greater flexibility to deploy our capital. We continue to execute on the $30 billion share repurchase program we announced in February, and we recently announced a 10% increase to our quarterly dividend. We have made it a priority to grow our dividend to a competitive rate, and since the beginning of 2019, we have more than tripled our dividend from $0.80 to $2.75 per share per quarter. Given our ongoing strategic efforts to lower the firm's capital density, and reduce earnings volatility, we are well positioned to grow it further. As I said, we are laser-focused on executing on our strategy. This moment in the economic cycle creates meaningful headwinds for Goldman Sachs and our business mix. At the same time, we are making tough decisions that are driving the strategic evolution of the firm. Given both these factors, it should come as no surprise that we are going to a period of lower results. I remain fully confident that we will deliver on our through-the-cycle targets of mid-teens' return creates significant value for shareholders. We'll now turn it over to Dennis to cover our financial results for the quarter in more detail.