The Goldman Sachs Group Inc.

S&P Global Ratings' outlook on Goldman and its rated subsidiaries is stable, reflecting our view that over the next two years the company will continue to generate strong profits and maintain good capital and liquidity as it aims to generate more low-risk revenue and boost profitability by strengthening longstanding businesses, diversifying in others, and becoming more efficient. We expect Goldman to continue to generate strong profitability, as measured by metrics such as return on equity and return on risk-weighted assets, and to outperform many banks, especially those with stand-alone credit profiles (SACPs) that are one notch lower. In our base case, Goldman's risk-adjusted capital (RAC) ratio of 10.7% as of December 2022 declines to 9.5%-10.0% in the next two to

...We expect The Goldman Sachs Group Inc., one of the world's largest and strongest players in trading and investment banking, to continue to generate better profitability than most similarly rated peers. The company has reported robust profitability over many years including a 12% return on common equity (ROCE) in the first quarter of 2023 and 10% in 2022. We expect its ROCE to remain in the double digits in 2023 and higher than that of most similarly rated peers. Still, tepid investment banking activity and reduced asset prices may limit its returns in 2023. A potential recession, market uncertainty, and elevated volatility increase credit and market risk for Goldman, but we expect it to weather the challenges. Volatility and declines in asset prices could pressure the creditworthiness of Goldman's counterparties and increase the odds of losses on the company's trading inventory. An economic downturn also could lead to higher credit losses on the company's loans and lending commitments....

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