Update: The Goldman Sachs Group Inc.

S&P Global Ratings' outlook on The Goldman Sachs Group Inc. 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 10.4% as of June 2022 declines to 9.5%-10.0% in

...We expect Goldman, 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 three quarters of 2022. We expect its ROCE to remain in the double-digits in 2023 and higher than that of most similarly rated peers. Still, the ongoing drop in investment banking activity and falling asset prices may limit its returns into 2023. A potential recession, market uncertainty, and elevated volatility increase credit and market risk for Goldman, but we expect it to navigate the more challenging environment. Volatility and declines in asset prices can 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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