Goldman Sachs Group Inc at UBS Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Brennan Hawken - UBS Equities - Analyst : That's right. February. We've got to be in Biscayne. So, it really is true. You need no introduction, but CEO and Chairman of Goldman Sachs, pleasure to have you back yet again. So, I would love to start, 5 years ago you had the first ever Goldman Sachs investor Day. A laid out a lot of plans and you made a lot of changes since then. So, when you look back and reflect, what do you think are the most significant changes that were implemented across Goldman since then?

Question: Brennan Hawken - UBS Equities - Analyst : And certainly. A lot of that, the equity market is noticed too. Goldmans a pretty great stock here. We made progress, yes, so that's wonderful. Looking ahead in the next few years, at a high level, what are your top priorities? I'd be interested to hear that. And you've also made some organizational changes recently. So how do those come into play?

Question: Brennan Hawken - UBS Equities - Analyst : You guys certainly are well positioned to benefit from some of those secular trends in private markets. I mean, that's been a theme that just keeps coming up. So, I'd love to shift gears, excuse me, I love to shift gears a bit. We had a big election a few months ago, new administration. It's really almost added octane to the excitement around the capital markets recovery. So, we'd love to hear about your thoughts on the new administration and what you think the implications could be.

Question: Brennan Hawken - UBS Equities - Analyst : Right? And just because you touched on it, one of the questions that's come up a bit from investors during the conference is the fact that there's a lot of excitement around all of that reopening. January started a little slow. Yeah. Do you think that it has to do with some of the policy uncertainty that you hit on? What do you think might be causing that? And what's your expectation around and reaction to the swell of January? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, GS.N - Goldman Sachs Group Inc at UBS Financial Services Conference

Question: Brennan Hawken - UBS Equities - Analyst : Yeah, that's all fair. You touched on the regulatory shift, I think, which is--

Question: Brennan Hawken - UBS Equities - Analyst : No, yeah.

Question: Brennan Hawken - UBS Equities - Analyst : especially versus the year prior.

Question: Brennan Hawken - UBS Equities - Analyst : which was effectively a capital markets recession. Yeah, so, you touched on the regulatory shifts, which I think are really important. I'd love to hear your thoughts on which parts of your business you think could see the greatest impact from some of these anticipated. Well, the primary, I think there are two. Primary focus is around for financial services and large banks, in particular, around, let's say a little bit of a regulatory reset. And I would just say as a general matter, 15 years ago as we came out of the financial crisis, Dodd-Frank went into place. It does make sense to step back. Okay, we're in a very different place and say, okay, what do we do that makes sense and what do we do that needs to be adjusted in some way? And so, I think the most significant thing that's going to get a lot of attention is the capital regime. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, GS.N - Goldman Sachs Group Inc at UBS Financial Services Conference And as there are 3 aspects of the capital regime that are getting attention. The first is Basel 3, which ultimately does need to be resolved. And my own view is we'll be in a much more constructive place with that than the perception of where we were, a year ago. The second is CCAR, and I think you're aware that the industry had discussions with the Fed for a number of years. Over 5 years, the industry has felt that this process was not correct. It was not being executed correctly. It was not legal, and, ultimately, and the industry took this very seriously, the industry has filed a lawsuit to try move this. That lawsuit was really filed to Stay the industry's rights because of the statute of limitations issue around the industry's rights around this, and there'll be a process, I think, to get that to a better place. And one of the things that are important in that one, more transparency around models, a better understanding of what the models are indicating and why, and then secondarily more consistency to allow an ability for institutions to plan. So, what I really want, I want capital to be right. Okay, I'm not sitting here saying it's got to be less. It's got to be. I want it to be right because I know when it's right, and we can plan, and we know it will be consistent for a number of years. We can run our business and optimize around that, but what you can't have been up, down, up, down, unclear, and I think we'll get to a better place than that. And I also think when you look at the construction of CCAR, directionally and the SCB, we have more to benefit from that if that gets reorganized in some ways. So that's the second thing. And then third, G-SIB, in the original statute, G-SIB was supposed to calibrate against, GDP growth and market growth going back, I think, to 2013 to 2014, it hasn't been calibrating and so that's in the statute around G-SIB. And so, that's a third. So that whole capital regime, that's first, and I would hope in the next, 12, 24 months we can have more clarity on that. And by the way, that's good for investors because you look across the industry that you cover, everybody's running big buffers. That capital should be reinvested in the system that drives investment, that drives growth, that drives lending growth. That's a much more constructive way to operate. And so I think we'll get to a better place there, but we'll see. But there's a lot of focus on that, by the industry and I also think regulators to get this resolved and get to a better place. Second, I think the industry is just very focused on, the amount of activity from regulators, and we want more transparency, around that activity, and I think it's been a headwind for firms. It's required us to make significant investments in infrastructure, and we hope, that that pendulum will swing a little bit and I think we need a regulatory construct, but the regulatory construct is supposed to ensure that the system is safe and sound. It's not supposed to be intruding on a much broader basis. And so, we look forward to working with the regulators and with The House Financial Services Committee, Senate Banking Committee to try work with the regulators to get this to a better, more transparent place. Transparency is important in this stuff because transparency creates accountability, and I think accountability is important on both sides. Yeah, I think that's really well said and it's absolutely the CCA process, the opacity, I mean it's. It's a little mad. I mean, and so it's,

Question: Brennan Hawken - UBS Equities - Analyst : Yeah, I think there's a really good shot of getting to a better place.

Question: Brennan Hawken - UBS Equities - Analyst : You spent some time talking about the investment banking outlook, so what I'd love to hear is maybe your perspective on the trading outlook. A trading has been better certainly than the banking side and strong performance in 2024 for sure from Goldman and some of the competitors too, but you guys really had a strong 2024. What do you think the opportunity set for the trading business is for 2025 and beyond?

Question: Brennan Hawken - UBS Equities - Analyst : You guys started to break out the financing revenues, which is really helpful speaking to that stability.

Question: Brennan Hawken - UBS Equities - Analyst : Yeah, the financing relationships and the trading their strategic relationships.

Question: Brennan Hawken - UBS Equities - Analyst : I would love to hear your thoughts on capital deployment. So you commented on the regulatory environment, the capital, and the change in the capital regime is something that one of the big things you expect. So how should we be thinking about the deployment of that capital? Yeah.

Question: Brennan Hawken - UBS Equities - Analyst : right? And certainly based upon your expectation of the opportunities that. The opportunity to deploy in the business is probably going to be pretty solid.

Question: Brennan Hawken - UBS Equities - Analyst : Yeah, we would love you-- touched on it.

Question: Brennan Hawken - UBS Equities - Analyst : Sure. You touched on the asset and wealth management business before, and I'd love to circle back to that. You've grown the business really well. You've almost shifted the approach where the HPI is now historical, so you're working your way out of there. So, there's been a shift to the strategy. What do you do? Thinking about when you think about the next few years where you are most excited about growth and how are you thinking about that business strategically?

Question: Brennan Hawken - UBS Equities - Analyst : Yeah, I mean when you guys laid out those fundraising targets at the first investor day, I was a little sceptical. You've crushed them. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, GS.N - Goldman Sachs Group Inc at UBS Financial Services Conference

Question: Brennan Hawken - UBS Equities - Analyst : For sure. And you guys have you touched on wealth business, we're here at UBS conference, very wealth centric firm. So, I'd love to drill down there, and you touched on the ultra-high net worth nature of your wealth business, so it's differentiated. You hit on very briefly a couple of the components of growth that you're focused on, but I'd love to hear a little bit more and drill down on that if you don't mind.

Question: Brennan Hawken - UBS Equities - Analyst : Yes, yeah, that's been thematic throughout all yesterday, and I expect today too. I would love to touch on talent. You guys delivered some really impressive comp leverage last year, but it's a competitive business for talent. So how are you thinking about that dynamic in 2025 in terms of the level of competition and how you need to continue to invest as you've referenced? Yeah.

Question: Brennan Hawken - UBS Equities - Analyst : Right, and efficiency is a big thing that you've been focused on. That was one of the official excuse me, efficiency ratio targets or one of the things that you laid out. So how do you think about the balance between efficiency and investing and where do you think the opportunities to invest reinvest some of those

Question: Brennan Hawken - UBS Equities - Analyst : Right. One of the ideas and questions around capital is inorganic growth. So, you guys have stated several times, so I'll just include it in the question. Bar is high. I totally get that. But when you think about, you have done some small M&A in the last few years, you obviously, as we talked about before, have a much more valuable currency today than you have before. So, does that change your thinking at all on M&A? And if you would be interested in an organic, what are the places where you think there's the best opportunity?

Question: Brennan Hawken - UBS Equities - Analyst : Right? And to give you credit, like when you have pursued something and it doesn't seem to be working, you have no issue adjusting.

Question: Brennan Hawken - UBS Equities - Analyst : Sure. We're approaching the end of our time, but I wanted to give the audience just a moment to see if there's any questions from the audience. Okay.

Question: Brennan Hawken - UBS Equities - Analyst : What I'd love to do when we're thinking about bringing this conversation home is think about returns, right? So, you've laid out some ambitious goals for ROEs. That's a strategic update you mapped out, your path to achieving the mid-teens. How should we think about the key drivers and What type of environment do you need in order to continue to progress? Sure, return profile. So

Question: Brennan Hawken - UBS Equities - Analyst : Have you ever thought that the targets are through the cycle, right, but something you just said made me curious. Have you ever thought about what you think the range might be around the mid-teens.

Question: Brennan Hawken - UBS Equities - Analyst : Well said, David. It's a great note to end on.