The Goldman Sachs Group, Inc. (GS) Earnings Call Transcript & Summary

Good morning, everybody. Welcome. We're really pleased to have you here at Goldman Sachs today. Three years ago, we stood on this stage and did our first ever Investor Day. At the time, we laid out a clear comprehensive strategy for us to strengthen and grow the firm. We talked about investment in our core business. We talked about 3 -- 4 opportunities that we saw to grow our business, Asset Management, Wealth Management, Transaction Banking and also Consumer Banking. And we said we would run the firm more efficiently. We also laid out targets to create metrics so that we could be held accountable and create more transparency for investors. Today is just another step in our journey. And I'm excited to have our leadership team here to talk to you today. I'm excited that after I step off stage, John Waldron, my partner and colleague, will talk to you about the state of our franchise, and our franchise is strong. Our other business leaders will walk you through the progress in their businesses and also the strategic direction and path that they're following as they move forward. We'll also lay out some more metrics so you can continue to track our progress. It has certainly been an interesting 3 years. Nobody could have imagined just a few weeks after we stood on this stage that the pandemic would break out, and the world as we know it and the economic and business world as we know it, would be so disrupted. And during that time, we stayed focused on our clients and on harnessing One Goldman Sachs, which has been a strong ethos for how we're running the firm. We worked hard on market share gains in our core business; we looked at elevating the performance of Global Banking and Markets, which has really improved over the course of the last few years; and we also worked hard to drive inflows, particularly around alternatives in our asset management business. We also have been very focused on shareholders. Our TSR has outperformed the peer average meaningfully. And over the last 3 years since our first Investor Day is plus 60%. Our EPS in 2022 was 40% more than it was in our last year before our Investor Day. We returned $18 billion of capital through buybacks and dividends and grew our dividend meaningfully. And our average ROE over the last 3 years was in line with our targets. We made tremendous progress in our core businesses. Global Banking and Markets is an extraordinary franchise. And over the course of the last 3 years, we've meaningfully strengthened our market share, have continued to enhance the way we serve our clients and have grown financing, which has been an important strategic objective. I'm excited that you'll hear from Dan Dees, 1 of the 3 leaders of that business that will walk you through the progress but also the opportunities we have to continue to strengthen that franchise. In Asset & Wealth Management, we've been on quite a journey. And I think one of the most significant things we've done over the course of the last 3 years is to really take a bunch of disparate businesses inside Goldman Sachs and organize them in a very, very powerful platform. Our Asset & Wealth Management platform is the key driver for growth as we look forward as a firm. We are set up to drive management fee growth, and this is key to meeting our firm-wide targets. We've made specific management changes to that business to help us execute. And I'm excited that Marc Nachmann and Julian Salisbury, the 2 leaders of that business, will take you through our strategy and also our performance as a very, very significant investor in markets. On the Consumer business and Platform Solutions, I've certainly reflected a lot over the course of the last 3 years. As I reflect on our journey around these businesses, I certainly think that we could have done a better job in a more substantive way, bringing you all along on the full activities around our Consumer business. I think 3 years ago, when we stood on the stage for Investor Day, we laid out for you a realistic assessment of the investment that would be necessary and the progress that would be made over a 3-year period. There were some clear successes but there were also some clear stumbles. We learned a lot. First, we built a very successful deposit platform. It's hugely strategic for the firm. It's attractive and it meaningfully benefits consumers. We built differentiated technology platforms that we believe have meaningful value. On the direct consumer businesses, we found them more challenging. It became clear that we lacked certain competitive advantage and that we did too much too quickly, which affected our execution. Stephanie Cohen who's been at the firm for 24 years will talk to you later about the platform journey and our path as we work to drive to profitability. We're a smaller set of businesses -- a smaller and more focused set of emerging businesses. We have interesting technologies and great partners. We're focused on profitability, the right strategy and will be nimble and flexible. As I think you all know, we've significantly narrowed our ambitions for our Consumer strategy, and as we drive toward pre-tax profitability, we're also considering strategic alternatives for our Consumer platforms. I want to spend a moment now on targets. We set out 3 years ago a greater than 13% medium-term ROE target in a normalized environment. I would certainly say the last 3 years have not been normal. There have been extraordinary tailwinds in response to the pandemic and certainly in the last year, coming off the war in Ukraine and a tightening economic climate meaningful headwinds for our business mix. Our revised targets of 14% to 16% ROE and 15% to 17% ROTE are appropriate through the cycle. We recognize that we operate in a cyclical industry. We're very focused on share gains, strengthening our client franchise, and I also think one of the things you saw in 2021 is our business is set up to capture the upside when the market environment allows it. As we go forward, we'll talk to you about how we can continue to grow and continue to strengthen the durability of our business. Our strategy, to some degree, is a reflection of our purpose as a corporation. And we've spent some time over the last year refining and rethinking that. We aspire to be the most exceptional financial institution, connected by our 4 core values of client service, partnership, excellence and integrity. Exceptional is not a given. Sometimes we fall short, sometimes we don't execute. But we always learn and adapt. We are constantly focused on overdelivering and outperforming for our clients. As I travel around and meet with clients, one of the things I hear very often is how exceptional our people are. Our people are bounded together by our culture. Our mission is to bring exceptional people together to serve our clients. As the firm has grown, we must continue to invest in our people and our culture. An example of that was a few weeks ago, we were able, for the first time in 4 years, to get all of our partners together down in Miami, Florida. We have not done that since 2019. It was a very successful week. We talked about what we had accomplished, we talked about our forward strategy, we talked about opportunities to invest in our people and our culture. And I felt terrific because our partners left energized, excited about the progress but, more importantly, excited about what we can do as we all move forward together. A key aspect of our culture is our focus on risk management. We're always focused on protecting capital and reputation. We leverage processes, deep analytics, empower control side functions and this deep culture of partnership. I've been at the firm 24 years now, and I really see it as embedded in the DNA of the firm over generations of people and over decades. As our profile shifts and we have new businesses there are always new things to learn and new things to look at. We have to be learning. We have to be investing. I feel good about the way we've navigated the environment over the last handful of years, but we won't always get it right. And when we don't, we reflect, we learn and we adapt. I think that's the essence of a good risk management culture. So when you take our purpose, our culture, our talent, our track record of risk management, I think we're incredibly well positioned to serve our clients. We are stewards of their trust that has been built over a very long period of time. Goldman Sachs has a deep history with generations of people that have had significant ideas and significant influence. We work hard to maintain that in service of our clients every day. In closing, we are focused on the success of our clients, the Goldman Sachs franchise, and we drive at that through our One GS operating ethos. It is not a tagline, it's the way we are operating the firm. We're working hard to raise the floor on returns and achieve our through-the-cycle targets. Our leadership is firmly aligned with shareholders. We're focused on our key priorities to make the firm stronger and more diversified so we can deliver for shareholders. I'm now excited to welcome John Waldron onto the stage, and I'll be back later for questions. Thank you very much.

Thank you, David. It's a real pleasure to be here with everyone today. Yesterday was my birthday, so I'm also pleased to be celebrated my birthday week with our current and prospective shareholders. Okay. I'm going to spend my time this morning unpacking just how far we've come in the 3 years since our last Investor Day. In January 2020, right before the onset of the pandemic, we stood up here and laid out our strategy, our financial targets and a comprehensive set of growth priorities. Today, you will see how we have materially strengthened our client franchise and have done so over the course of 3 years, which we can all agree were anything but normal. Following my presentation this morning, we're going to zoom in deeper to each of our businesses with business leaders across the firm coming on stage to detail their forward plans and their execution priorities, all of which will continue to drive the strategic evolution of our firm. Now let me jump in and talk about the state of our franchise in more detail. On this stage 3 years ago, we made it incredibly clear that our clients are at the center of our strategy. We fundamentally believed and continue to believe that serving our clients in an exceptional manner would both strengthen our franchise and deliver returns for our shareholders. We codified this total commitment to our clients with our One Goldman Sachs philosophy and operating framework, which now underpins our unified approach to delivering the best of Goldman Sachs across everything we do. And you will hear more shortly from my partner, Kim Posnett, on how we have optimized and unlocked the power of One Goldman Sachs across all of our businesses. Now taking a moment to reflect on what sets our client franchise apart. I want to highlight 3 key attributes: first, our proven history and unwavering focus on serving as a trusted adviser to the world's leading businesses, institutions, entrepreneurs and individuals; second, our deep client-centric mindset, this has always been a core part of our DNA and permeates all aspects of our firm across our people, our technology, our organizational structure and our incentives and comes with a deep rooted culture of service and commitment to always deliver excellence; and third, our global, broad and deep platform are offering span across products, geographies and capabilities allowing us to provide unmatched and differentiated breadth for our clients. All united together by our One Goldman Sachs culture, which leads me to where we stand today. We have 2 market-leading businesses that are underpinned by several of the very best franchises anywhere in financial services. First, we have the preeminent Global Banking and Markets franchise now operating in 1 integrated segment. We have brought the #1 investment bank globally with an unparalleled merger franchise and a leading capital markets business, together with leading FICC and equity businesses that are one of the select few global franchises that can seamlessly serve clients across geographies and products. And we have spent the last 3 years strengthening our platform and bolstering our market position. And it shows, as we continue to capture the wallet and the mind share of our clients. And second, we have built a unified asset and wealth management business that is a truly unique platform. We are a top 5 global active asset manager as well as a top 5 global alternatives manager, with a premier wealth management franchise. This is a scaled business with over $2.5 trillion in assets under supervision on a platform that is global broad and deep with a significant market opportunity to grow. Now across these 2 businesses, we are a unique blend of top-tier intellectual capital, driven by a client service ethos with incredible global capabilities, and we are receiving very clear and direct feedback from our clients telling us how much better we are serving them as a unified organization over the last few years. And while that positive feedback is certainly very nice to get. It's the numbers that provide proof that One Goldman Sachs has resulted in a better client experience and is yielding real dividends for the firm. So the numbers on this slide demonstrate that the combination of our market-leading franchises and a relentless focus on client service and execution excellence drive outperformance. Looking at our average revenues in the 3 years leading up to our 2020 Investor Day and the 3-year since, you can see we have substantially grown the firm. We captured outsized share gains, and we expanded our client footprint, even while continuing to invest in our client franchise, growing our dividend and returning capital to our shareholders. On the right-hand side of the slide, we show our book value per share growth versus our next closest peer. We have grown our book value per share at a much higher rate in the short, medium and long term, and we will continue to run the organization with a long-term focus, investing to grow and strengthen our client franchise while creating long-term value for all of our shareholders. And underpinning all of these efforts is a deeply wanted culture of risk management, which has allowed us to navigate the volatility of the past few years very effectively. Now let's spend some time evaluating the progress we've made on our firm-wide and business level goals. Here is a snapshot of the targets we set out 3 years ago, alongside the revised targets we put out last year. As David mentioned, our Investor Day in 2020 was the first time in our history we set public firm-wide financial targets. In 2020, we set a target to achieve an ROE greater than 13%. Our average ROE over the past 3-year period is 14.8%. Excluding the impact of litigation, you will notice that we have exceeded our target for 2 of the last 3 years. And accordingly, we increased our target through the cycle to 14% to 16% in early 2022. Now we remain committed to delivering on these targets and are confident in our ability to do so given the underlying strength of our broad franchise. We have meaningfully elevated the structural return profile of our Global Banking and Markets business, and we expect substantial improvement in our margins and our returns in Asset & Wealth Management. Our returns last year were also impacted by a substantial drag from Platform Solutions, which was heavily burdened by reserve builds. Given the more challenging environment, we are continuing to focus on our cost structure, and our operating efficiency. And we are determined to unlock $1 billion of compensation and non-compensation expense efficiencies, which we can reinvest back into our core businesses. You'll hear more from Denis Coleman on this later this morning. So as we look forward, the combination of the continued strength in our 2 market-leading businesses, together with driving the Platform Solutions business to profitability as well as a laser focus on operating efficiencies, will enable us to hit our targets through the cycle. And while in tougher market backdrops, we may not hit our return targets, our actions over the last several years and going forward have definitively raised the floor while retaining the upside in more conducive markets and lowering the overall volatility of our returns. Now this page shows the detailed execution priorities that gave shape to our strategic plan. I know this is a busy page. This is purposeful to demonstrate the granularity of the execution plan that underlies our targets. And while we have not achieved all of them, we have made substantial progress across the vast majority of these KPIs. Let me help you navigate the page by calling out a few highlights. In Global Banking and Markets, we have demonstrated incredible success in materially improving our wallet share and penetration across this client franchise, reflecting close to 400 basis points of incremental share in this business. And we've increased our financing activities at a 16% CAGR to more than $7 billion in financing revenues for 2022. We are now ranked in the top 3 with 77 of the top 100 institutional clients across FICC and equities, up from a base of 51 at the last Investor Day. In Asset & Wealth Management, we've grown our assets under supervision at a very healthy clip and are well ahead of pace on many of our 2024 targets, particularly those targets related to our alternatives business. We had a record year in fundraising in 2022 with $72 billion raised across our alternatives franchise, resulting in close to $180 billion raised since year-end 2019, well exceeding our original $150 billion target and representing substantial progress towards our revised $225 billion target. And our Wealth Management channel has been a meaningful contributor to these fundraising efforts. Of the $72 billion in alternatives business that we raised last year, $27 billion of that came through this wealth platform. And we now have loan penetration with approximately 30% of our U.S. private wealth clients, leaving us plenty of the platform in transaction banking, aggregating $70 billion in deposits across more than 450 companies in a business that was profitable in 2022. And at a firm-wide level, we have diversified our funding mix, raising nearly $200 billion in deposits since year-end 2019and ending last year with $120 million in consumer deposits that are extremely valuable funding for the firm. We've also streamlined our organizational structure and executed an allocation strategy with more than 40% of the firm's employee base now in strategic locations. So at the end of last year, we executed on our strategic realignment. These changes will bolster the execution of our strategy, strengthen our ability to deliver on our targets and on step in our strategic journey to building a more durable firm that generates higher returns through the cycle. This is a natural progression that strengthens our ability to deliver for our clients and provide greater transparency for our investors. And in the spirit of simplicity, you will hear us consistently focus on managing towards 3 clear goals for the foreseeable future: first, maximizing our wallet share and growing our financing businesses; second, growing management fees; and third, driving platform solutions to deliver profitability. Let's now shift into the businesses, starting with Global Banking and Markets. We have preeminent global franchises operating at scale with client centricity driving our outperformance. Let me highlight some of them for you here: a merger advisory business that has held the #1 position for more than 20 years running and generated $3 billion more revenue than our nearest peer firm cumulatively over the last 3 years; an industry-leading equity capital markets franchise, delivering $800 million more revenue than our nearest competitor cumulatively since 2020; a preeminent prime brokerage platform serving more than 2,000 clients and driving significant operating leverage and profitability for the firm and the breadth of our macro and micro franchises and expertise ranging from our rates business, to our commodities franchise, emerging markets, mortgages, FX, credit, structured products and derivatives, among others, where we continue to do an extraordinary job serving our clients while navigating periods of extreme volatility. Running these businesses together is unlocking significant synergies in growing our financing footprint and improving our capabilities while driving a multiplier effect via continued wallet share gains and revenue growth. There is no doubt that the tremendous execution in these businesses is driving clear outperformance in Global Banking and Markets, where over the last few years we have successfully improved the durability of our revenues by virtue of increasing our wallet shares by 370 basis points and growing our financing activities by more than a 16% CAGR, which together with improved expense and capital efficiency in FICC and equities, has fundamentally raised the overall return profile of this business. This has driven our industry-leading ROE of 16.4% in 2022. There are 2 handfuls of banks with the scale and breadth of service the world's largest institutions and share continues to accrue to the top 3 banks including Goldman Sachs. You will hear more today from Dan Dees about how our strategic priorities are further strengthening our wallet shares and growing our financing activity set us up well to drive more durable revenues and returns across this segment. Now let's turn to Asset & Wealth Management. This business is unique and special with global scale in active asset management as well as in alternatives fully complemented with a scaled wealth management platform. We deliver consistently high-quality products and solutions across the investment spectrum with proven long-term performance through market cycles. Asset & Wealth Management benefits significantly from being part of the broad Goldman Sachs ecosystem, a key competitive differentiator for this business. Now these strengths are clearly driving more assets onto our platform, leading to significant growth in management fees. We have grown our management fees at about 13% CAGR since 2019. And with $8.8 billion of management fees, we are well on our way towards our $10 billion target. The same goes for our alternative fees, which stand at more than $1.8 billion versus our $2 billion target. These targets are clearly not the limit of our ambitions. We are also making meaningful progress in reducing the total size of our direct investments in alternatives on our balance sheet as we work to complete the journey towards a scale funds-driven business. You will hear more detail on our balance sheet progress and our forward expectations shortly from Marc Nachmann. We remain extremely bullish on the opportunity in front of us to drive substantial growth across our Asset & Wealth Management business, which will contribute significantly to a more resilient and valuable Goldman Sachs. The successful execution of our journey through reducing our balance sheet and growing our assets under supervision and management fees consistently may, in fact, be the largest value unlock for the firm over the next several years. Now turning to Platform Solutions. This business is grounded in our core competency of serving corporate and institutional clients with a track record of building valuable technology platforms. In transaction banking, we have built a digital deposit and payments platform serving corporations that has proven to be a more modern and transformative offering that, as I said earlier, has attracted 450 clients with $70 billion in deposits in just a few short years. And we have developed partnerships with American Express, Fiserv and Stripe, among others, that have the potential to broaden our reach considerably. The business is profitable but has substantial growth in front of it as we invest and build on our capabilities further. We're still at the beginning here and are focused on steadily growing this platform to become more of a primary provider of transaction banking services to our clients over time. In Consumer Platforms, we have enterprise partnerships with 2 great clients of the firm, Apple and General Motors, both of whom are benefiting from the digital credit card platform we built that strengthens their customer relationships. We have built something unique and valuable here, and we are continuing to work hard to run this platform more efficiently with excellence across different market environments. And we developed partnerships with American Express, Fiserv and Stripe, among others, that have the potential to broaden our reach considerably. The business is profitable, but has substantial growth in front of it as we invest and build on our capabilities further. We're still at the beginning here and are focused on steadily growing this platform to become more of a primary provider of transaction banking services to our clients over time. In consumer platforms, we have enterprise partnerships with 2 great clients of the firm, Apple and General Motors, both of whom are benefiting from a digital credit card platform we built that strengthens their customer relationships. We have built something unique and valuable here, and we are continuing to work hard to run this platform more efficiently. And merchant point-of-sale lending or GreenSky, which we acquired last year. Stephanie Cohen will go into more detail on this platform a bit later on. Now as the consumer platform scale, they are weighed down significantly by reserve builds in addition to their operating expenses. And our approach here is to drive towards profitability and make the right strategic decisions, remaining dynamic and nimble and adapting as necessary. And as David highlighted, we are exploring our strategic alternatives with respect to our consumer platforms to ensure that we understand all opportunities to unlock value. Now let me close today by reiterating how proud this leadership team is with the progress we have made over the last 4-plus years. We have strengthened our world-class franchises, growing the revenue base of the firm, gain significant wallet share and become a much more important financier to our clients. And looking forward, we are capitalizing on our strengths and have dialed in our focus on the execution of our 3 key priorities. In Global Banking and Markets, we are maximizing wallet share and growing our financing activities. In Asset & Wealth Management, we are driving growth in management fees, and we are working to unlock value and platform solutions. As a management team, we are focused on reducing the volatility of our returns and raising the floor. We have the best talent, platforms, expertise and culture in place to serve our clients with excellence across different market environments. And we expect to capture more share while continuing to improve our returns, which positions us to drive material outperformance in more conducive markets. Our mission is to perform and execute, which will drive significant value for all of our shareholders.

Good morning. I'm Kim Posnett. Great to be here with you today. I've been at the firm 18 years, and I currently serve as Global Head of Investment Banking Services and Co-Head of One Goldman Sachs, with my partner, Sam Morgan. One Goldman Sachs was the first strategic priority highlighted by David and John when they took their leadership roles in 2018. And when I think back on my almost 20 years at the firm as an investment banker, 2 major things changed that inspired the creation of One Goldman Sachs. First, our clients changed. And second, we changed. Our clients grew dramatically in size and global reach and in business complexity. -- take 2 examples, Blackstone and Amazon. 20 years ago, Blackstone had $22 billion of AUM. Today, they have $975 billion of AUM, and they operate across multiple businesses. Look at Amazon, 20 years ago, they had a $7 billion market cap. Today, they have just under $1 trillion of market cap. And so their needs have grown commensurately in breadth and complexity. In response to our clients' growth, we too changed. We evolved our products and services expanded. So with our clients got more complex as we got more complex, we realized we needed a strategy to deliver more expansive and holistic solutions to our clients. We needed a One Goldman Sachs framework to get the right people with the right expertise in front of our clients at the right time. So what is One Goldman Sachs. It's the organizational philosophy that underpins how we cover our clients in an increasingly complex world. It puts clients at the center of everything we do. And it's a very simple premise actually. We want to bring to bear our world-class intellectual capital and expertise across all of our businesses, which we believe is unique to us to better serve our global client franchise in a more integrated and comprehensive manner. And as John just mentioned, client centricity has always been a part of our DNA. But operating with a true One Goldman Sachs mindset has shifted from being a nice to have to an expectation we have of all of our people. It's become the operating ethos of the firm. So how did we operationalize One Goldman Sachs. Here is a visual representation of how we've done it. We have thousands of clients across the world represented by these gray dots, and we have thousands of people across our businesses. When we launched One Goldman Sachs, we started by identifying large globally complex clients that we're working with multiple businesses of the firm. Here's an example. 20 years ago, I might have covered this client with just my investment banking team, focusing only on M&A, equity, high yield or investment grade. Fast forward to today, we now have partners like myself who are responsible for the entire firm wide relationship. And as part of that, they're responsible for building firm-wide teams that bring together the relevant experts and thought leaders across the firm to serve the client. This approach clearly requires enhanced collaboration. Our strategic realignment in October was actually highly accretive to One Goldman Sachs for this reason. We're not just cross-pollinating our partners across different businesses. We're structurally bringing our partners and our people more broadly, closer together, making it easier for them to collaborate. We've also built proprietary technology and infrastructure to support all of this, and we have made great strides, but there's still more to do to be even more data-driven and even more technology enabled in our approach. Last, but certainly not least, we have spent an incredible amount of time on education and incentives. We want our people to know that if they do this well, they'll get them awarded and compensated for it. So this is not just a theoretical approach. We've been very thoughtful and deliberate in how we've built this with an eye towards scalability and repeatability. As you can imagine, this is not easy to execute at scale across thousands of people. So we focused on systematic processes and rigorous execution. So let me give you 2 concrete examples of One Goldman Sachs in action and how we know it's working. So care is a large global corporation that was in our pilot program and wanted our advice in 3 areas: ESG, capital structure and risk management. And I'll focus on what we did for them around ESG because that was their main priority at the time. You can see here in the middle, all of our sustainable finance offerings across different areas of the firm. Some, not all, were relevant to this particular client. Through our One Goldman Sachs approach, we were able to harness and deploy all of these different and disparate ESG capabilities across the firm for this client. And you can see here on the right-hand side, some of the actual deals that we executed that were bespoke ESG solutions designed specifically for them. That included leading their inaugural sustainability bond, launching a money market DEI fund and much more. What's so important to understand is that the effects of the program have permeated our culture and how we cover our clients, whether or not they were in the initial pilot program. So let me now give you an example of a client that was not in this initial pilot program, and I think it's a great example of the scalability potential of One Goldman Sachs. So this is a private family-owned packaging company based in the U.S. The Chairman and Co-Founder has been a very close private wealth client of ours for years. And one day, he called his private wealth adviser and said he was looking to diversify his family investments, and he was considering selling the business. And he was planning to talk to multiple investment banks. The private wealth adviser encouraged me to spend time with our industrial bankers at Goldman, which she did. That early investment banking introduction was a critical point in establishing the broader firm wide relationship. And it was the start of a trusted advisory relationship between this client and our bankers. Ultimately, the investment banking team won the sell-side mandate. And as the banking team was executing the sale of this business, they brought in our leverage finance team who arranged the staple financing and led the syndication of the debt financing. And as part of that process, our leveraged finance team introduced the buyer to our asset management team, who ultimately participated in the junior debt financing. When the company sale was finalized, the family, by the way, not just the Chairman, but the entire family put the proceeds of the sale back into our private wealth business. So here, we have 3 separate businesses: wealth management, investment banking and asset management all working together seamlessly to deliver a holistic and integrated solution for our client in a clear win-win-win situation. To me, that's one Goldman Sachs at its best. It's highly accretive to multiple parts of our firm, but more importantly, it's highly accretive to our client, who gets the best of Goldman Sachs. So how do we know that this is having commercial impact at scale? We start by asking our One Goldman Sachs clients, how we're doing. So you can see here 3 separate client quotes, one from an alternative asset manager, one from a public pension fund and one from a corporate. There's thousands more. And I think it's worth pausing on the first one, best people, best execution, best advice and a collaborative culture that brings it all together. No other bank is close. Equally, we're very focused on quantitative measurable KPIs. Here's just a few examples. 94% of our One Goldman Sachs clients rate us positively. 91% work with at least 3 businesses across the firm. And most important are these last 3 KPIs. They show how One Goldman Sachs translates into meaningful commercial impact for the firm. Since our first Investor Day, we've driven significant growth in fee share and wallet share across our One Goldman Sachs clients. Within the program, we saw 445 basis points of growth in investment banking fee share and 255 basis points of growth in FICC and equities wallet share. Importantly, those share gains outperformed our broader client set across all of Global Banking and Markets based on the same analysis, gain and expand those share gains more broadly. One Goldman Sachs has also been a meaningful driver of alternative fundraising for our Asset & Wealth Management business. This $31 billion that we raised from One Goldman Sachs clients is important because of the quality of those mandates. They're happening because of One Goldman Sachs and because of client-centric solutions. So here's what I want to leave you with today. First, we have the best client franchise in the world. Second, One Goldman Sachs works. It's deliberate. It's well executed and the results have been remarkable. Third, our key insight is that One Goldman Sachs is bigger than a pilot program. It's scalable. This culture, this ethos, this mentality is applicable and extensible to a much broader set of clients. Definitely, it will drive an even better client experience. So with that, thank you for your time. Let me turn it to my partner, Marc Nachmann.

Thank you, Kim. Good morning. Since joining AWM 3 months ago, I dissected every aspect of the business, met with our clients and worked closely with our people. Based on everything I've learned, I'm super excited about the prospects for the business. We have all the key ingredients in place to current business that has scale across public and private markets; second, we've delivered strong investment performance across all asset classes; and third, our sizable platform already has a history of durable growth. The 2 pillars underlying everything that we try to achieve are delivering a superior investment performance and a top-notch client experience. These 2 pillars will drive our success over the long term. Importantly, we have the key components to accomplish these objectives, as shown on this slide. I'll expand on each of them over the next few minutes, and Julian will talk more about our investment performance. Some people told me that being a captive asset manager as part of a large bank is a disadvantage. I disagreed. I think it's quite the opposite, at least at Goldman Sachs. The ability to leverage the wider Goldman Sachs ecosystem is an incredible competitive advantage that drives our ability to deliver differentiated client experience to expand our client base and offering. As we already discussed, we're laser-focused on continuing the transition of our on-balance sheet investment portfolio to third-party fund model. We remain committed to reducing the capital intensity of our business to drive higher routine dollars. We expect harvesting efforts to drive further reductions to below $15 billion by the end of next year and 0 over the medium term. We expect this to free up approximately $9 billion in capital and reduce the firm's SCB by 60 basis points. To be clear, we're not eliminating our balance sheet investments entirely. Rather, we're eliminating the direct investments we've made that are unrelated to client co-investments. Our balance sheet remains a strategic advantage for Goldman Sachs. It allows us to seed new strategies and demonstrate alignment with LPs, a very powerful differentiator. We'll continue to invest roughly $20 billion in our funds and alongside our clients. Finally, we expect the firm's Community Reinvestment Act investing requirements which are managed by this segment to increase over time given projected growth in our bank subsidiary. This slide brings together the financial framework for the business, which I will go through in some detail. There's a lot on this slide. Fortunately, we have an awesome footnote with all the details. We've made 2 pro forma adjustments to more accurately reflect our go-forward financial picture. First, we've adjusted our private bank revenues to take out the Marcus loan business. Second, we adjusted the investment revenues by taking out the impact of our historical principal investments that are earmarked for sell-down. As I've shown on the prior slide, we expect management fees and private bank revenues to grow organically at a high single-digit percentage rate. We are targeting an annual run rate of $1 billion from incentive fees and over $2 billion from our investments in and alongside funds. This assumes annual returns at the investment level of roughly 11% for equity-related investments and 9% to 10% for debt-related investments. These estimates are conservative relative to our historical returns and out of future performance targets for the underlying funds. Moving to the cost side. We made 2 adjustments consistent with the revenue line. First, we removed PCL expenses and capital associated with the Marcus loan business. With regards to the historical principal investments, we removed capital and PCL, but to be conservative, we only remove the CIE expenses associated with specific investments. We have an existing team working on these investments, whose costs we continue to reflect in our adjusted pretax number. As we exit the historical principal investments, this team will be able to fully transition to work on our growing alternative funds business. In other words, we already have the team and costs in place for the larger fund business we're building. Overall, we'll be able to see significant operating leverage from 3 primary areas: organic revenue growth, fully transitioning our alternatives business into the fund model and converging to normalize incentive fees and investment returns from a low in 2022 when both equity and debt markets had negative returns. We will be on a multiple-year journey during which we will also continue to invest in our platform to further enhance the client experience and our operating efficiency and the resulting ROE in the mid-teens. Going forward, these are the key targets that you can hold us accountable to. To be clear, these are medium-term targets. Our ambitions are higher. Let me conclude by reiterating why I'm so excited about this business. We're a world-class asset and wealth manager operating at scale. We're a trusted adviser to our clients delivering strong investment performance. And our business is already exhibiting strong growth. Layering into this the 3 organic growth strategies I discussed will allow us to drive more durable revenue and earnings growth, which will enhance the returns for the firm. With that, I'd like to pass it on to Julian for a deeper dive into our investment strategies and performance. Thank you.

Thanks, Marc. Good morning, everyone. I'm Julian Salisbury, Chief Investment Officer of Asset & Wealth Management. I've been at the firm for nearly 25 years, so not quite as long as Marc, joining as an analyst in the Finance division in 1998. I went on to become the Head of the Global Special Situations Group, the Global Head of Merchant Banking and the Global Co-Head of Asset Management. Today, I want to talk about 2 things: first, our world-class investment platform; and second, to provide a deeper dive into our investment capabilities, performance and culture. The breadth and depth of our investment platform is one of our greatest strengths. And as Marc said earlier, we've been doing this for a very long time, more than 30 years. Today, we manage a global scale business with more than 2,000 investment professionals across all major asset classes, and this allows us to capitalize on opportunities whatever the environment. And with our rich history of recruiting and developing the next generation of talents, we continue to build upon the culture and drive innovation in the business. In 2019, we continued to enhance our operating model and brought together our private investment teams. And at the end of 2020, we then combined our private and public investment teams onto one unified platform. As a result of these combinations, our investment process has been enhanced by diversity of thought, which is the result of bringing together teams with different backgrounds and experiences. And we've also seen greater collaboration between teams resulting in better decision-making and stronger origination. And by operating as one unified platform, we're also better able and better positioned to harness the broader resources of the firm. And operating at this scale also allows us to invest more into the investment platform so we can drive forward important strategic initiatives such as the Goldman Sachs value accelerator and catalyst. To remind you what both of these are: first, the Goldman Sachs value accelerator is a centralized operating platform that partners with our private portfolio companies to help them build enduring businesses and create value by leveraging the Goldman Sachs ecosystem. We believe this accelerates value creation of the companies, which is a valuable source of alpha. And we also believe it means management teams view us as a partner of choice because of our ability to deliver resources not broadly available to companies in the size range we target. This helps us both source and secure investment opportunities in addition to driving value creation. Moving on to Catalyst. Catalyst is a next-generation data analytics platform developed by our growth equity team and our engineers. It leverages proprietary and third-party data sets to track more than 2 million companies globally to help our investment teams more efficiently source hypergrowth companies. Catalyst enables our investors to seamlessly traverse company overviews, geographies, sectors, market intelligence data as well as to identify existing points of connectivity between management teams, investors and Boards of Directors. From left to right, the slide behind me which Marc showed you earlier, read from our most liquid assets to our least liquid assets. When we form the Asset Management division in 1989, we had one existing offering in the business. It was a money market fund and had $10 billion in it. 30 years later, we now offer solutions to our clients across every major asset class, a $2.5 trillion of assets including $450 billion of alternatives. We're an active manager with in-house capabilities that span over 25 major investment strategies, including sustainability. We also have one of the largest open architecture platforms in the world, which similarly spans over many asset classes. From a shareholder perspective, our diversified investment platform gives us a balanced portfolio of complementary investment opportunities, and this is particularly useful in periods of market volatility when individual asset classes can move in or out of favor. Now I don't have time today to talk about all of our investing capabilities, but I do want to share a few examples that demonstrate the strength of our platform. On the traditional side, our fixed income franchise started with the opening of our money market fund in 1981. Now in the money markets, there's a stark difference between managers who position actively and those who buy and hold. And as I said earlier, we're an active manager. And this has driven significant outperformance versus most of our peers. Our technology capabilities allow our investors to seamlessly reflect their active views across the breadth of our fixed income platform, enhancing efficiency and giving them more time to focus on markets. In 2022, strong performance helped our money market fund franchise grow assets by $30 billion, outperforming most of our peers in asset growth. And over the past 5 years, our money market franchise led all other managers in global institutional market share gains. Moving to public equities. Our Quantitative Investment Strategies team, or QIS, finds that their competitive advantage comes from 2 key areas. First, they leverage the large resources of Goldman Sachs built up over many years to power and refine their models and strategies, which helps them continue to innovate. We have over 18,000 data sets in our platform, tens of trillions of individual data points that are aggregated and assessed to form opinions on over 15,000 securities. This has helped to drive performance over the last 10 years with 96% of our assets outperforming their peers. And second, our QIS and fundamental equity teams benefit from working closely together and leveraging their respective subject matter expertise and data resources. In our Equity Solutions business, or QES, our 20-plus year history and leading customization capabilities means that we're ideally positioned for continued innovation and growth. In equity direct indexing, we have demonstrated consistent after-tax outperformance versus benchmark by nearly 200 basis points. The combination of our industry-leading performance with our leading customization capabilities has helped us become the #2 largest direct indexing provider with over 25% market share. Moving to our alternatives platform. I already touched on the GS value accelerator and Catalyst, which helped with value creation and sourcing across private equity platform. We're also a pioneer in the secondary market with a 25-year history. We have a global scale business with more than 70 investment professionals performing fundamental analysis of underlying assets. This is a business that is hard to break into for both traditional LP stakes as well as the continuation funds. In the traditional secondary space, we've evaluated over 12,000 funds, we've evaluated over $1 trillion worth of secondary transactions, and we execute on 50 to 100 secondary transactions per year. In the continuation vehicle space, strong GS sponsor relationships across Investment Banking, Global Markets and Wealth Management are another great example of why operating this business inside of Goldman Sachs is a huge competitive advantage and a source of alpha for our clients. In last year's Private Equity International Awards, our secondaries platform was named Secondaries Firm of the Year in the Americas and won Dealer of the Year in the United States, Europe and in Asia. Moving to private credit. We are 1 of the largest private credit managers globally with $120 billion of assets. We have a long history of investing across direct lending, mezzanine debt, hybrid capital and asset-based lending, supporting companies from the lower middle market to the large cap. And we do it globally. Our long history of investing across varying market conditions from performing through the distressed credit means we have a tested and resilient platform and an investment process that incorporates decades of learning. And this positions us to perform well in a variety of economic conditions. As in our secondaries business, incumbency is a major competitive advantage. We build upon long-term borrower relationships to be a key driver of new investment opportunities for the credit platform. And we also benefit from the adjacencies to our private equity franchise to support origination and our underwriting capabilities. And in this asset class, more than any other, the benefits of operating inside of Goldman Sachs are extraordinary. Sitting alongside the world's preeminent banking franchise means we're on the pulse of knowing when assets are going to transact or refinance. Our funnel is unmatched and the envy of our competitors. It's also another source of alpha for our clients. And we've talked about the unparalleled breadth of the investment solutions and the strength of the team. Now let me show the track record of those strategies and how we deliver for our clients. This slide views the investment performance of our traditional public market strategies as compared to our peers according to relative performance data of Morningstar. We have performed consistently and persistently over 3, 5 and 10 years. Over the past 10 years, 81% of our mutual funds have performed in the top half of Morningstar funds. An area of particular strong performance over the past 3 and 5 years has been our multi-asset solutions business, which sits at the heart of many of the strategic conversations we're having with our clients. Our goals to continue to deliver reliable and persistent investment performance with a relentless focus on performance improvement to continue to invest in the talent and the investment platform overall and to continue to compound our long-term track record. In our alternative strategies, we also have a long track record. And in many cases, like private equity, mezzanine, senior direct lending, secondaries and GP stakes, we have one of the longest track records in the industry. We have generated strong net returns for our investors, both relative to public markets as can be seen on this page as well as compared to our peers, with 93% of assets across our flagship private market funds performing in the top half of their peer universe over the last 5 years. We believe this highlights how our differentiated sourcing, unique insights and focus on value creation has generated attractive outcomes for our investors across each of our investment platforms through a dynamic environment. Now while distilling overall platform performance now to a few objective measures is complex, the best proof is to observe how our clients think about our performance, when given the opportunity to immerse themselves with our teams during their forensic due diligence and underwriting process. Our clients clearly recognize the strength of our investment teams, our platform, our culture and track record and reward us with their flows. As you can see on this slide, over the past 10 years, we've had long-term positive net organic inflows with growth in management fees as a result. Specifically, on the traditional side, we've had long-term net flows of $171 billion since the 2020 Investor Day. And on the alternative side, in a challenging environment, we've raised $179 billion since Investor Day. Clients supported us in a series of first-time funds across growth equity, private credit, real estate and sustainability. Clients also continue to support more established programs such as West Street Capital Partners and West Street mezzanine partners. Our leading investment platform combined with our ability to deliver the full suite of strategies across traditional and alternatives uniquely positions us. And the combined scale of our platform will ensure we have the resources to continue to invest into the investment teams in our relentless pursuit to drive performance. And with that, I'd like to thank you for being here today, and I'll now pass it on to Stephanie Cohen to cover Platform Solutions.

Thanks, Julian. Good morning. I'm going to start by addressing the topic that I know is on all of your minds. Since we announced the formation of Platform Solutions, I partnered with my colleagues around the firm to further develop our path to profitability. And it is with that goal in mind that we're executing on the following: number one, growing fee revenue and high-quality deposits and capital-light businesses like transaction banking; number two, managing the growth of the more asset-intensive businesses and consumer platforms while shifting the mix towards higher credit quality and higher margin loans and merchant point-of-sale lending; number three, realizing the benefits of scale by further enhancing our customer and agent experience and improving automation; and number four, continuing to take actions that will help us to manage through a potentially complicated credit environment. The Platform Solutions segment is made up of attractive businesses that all deliver more recurring revenue from net interest income and fees and they leverage the core strength of Goldman Sachs, our corporate and institutional franchise. As we have demonstrated since we launched these businesses, we'll be flexible and nimble. So as David and John said earlier, as we continue to drive towards profitability, we are also considering strategic alternatives in our consumer platform businesses. Today, in Platform Solutions, we power clients with innovative and customer-centered financial products. And we believe our approach is differentiated. We bring the best qualities of a technology player, and we combine that with the best attributes of a large bank, and we can pursue with elements that are uniquely Goldman Sachs. You heard from my partner, Kim Posnett about One Goldman Sachs. This is our most important competitive advantage because we're a B2B business that also serves millions of clients and customers. We collaborate every single day with the world's leading global banking and markets franchise. And then we combine that with a developer-centric approach. And it's that combination that led both Apple and General Motors, leaders in their respective industries, to partner with us. In order to help you better understand our path to profitability, I'm going to dive deeper into each of our businesses. In transaction banking, we serve large corporates, and we partner with tech forward financial platforms like Stripe to make our services available to small- and medium-sized businesses. Over the last 3 years, we've successfully collaborated with our client coverage teams in Global Banking and Markets to attract approximately $70 billion in deposits as of the end of last year. In enterprise partnerships, we also leverage that leading Global Banking and Markets franchise, we empower large consumer-facing brands to grow their businesses by embedding financial products and their ecosystems. Our existing partners give us access to an engaged audience of over 1/3 of the U.S. population. In merchant point-of-sale lending, we are the largest digital provider of home improvement point-of-sale loans in the U.S. In 2022, we serviced a portfolio of approximately $10 billion. We've originated over $6 billion in home improvement loans since we acquired GreenSky last March, over $2 billion of which sit on our balance sheet today. The businesses of Platform Solutions share a developer-centric mindset and a cloud-native platform. And while we still have a lot of work to do, we should take a moment and pause and acknowledge that we're solving real client and customer pain points and have demonstrated strong product market fit. Later today, you'll hear about our league table positions in Global Banking and Markets. And while we don't have the same track record that comes with over 150 years of history, our clients and our customers, love our products. And the results of that client and customer adoption are on this slide. In Transaction Banking, we generated over $300 million in revenue last year. And in consumer platforms, we generated approximately $1.2 billion in revenue despite only beginning to originate GreenSky loans on our balance sheet in the third quarter of last year. Historically, these businesses were organized across different divisions in the firm, each with its own set of targets. Now that they're combined in 1 segment, we believe it's important to provide new targets that reflect where each business is in its growth trajectory. All of these targets are geared towards getting us to profitability with a focus on building a sustainable platform and ultimately delivering results that are accretive to Goldman Sachs. I'm now going to cover each of the businesses and I'll provide you with details that support our path to profitability before I lay out our targets at the end of the presentation. Let's start with transaction banking. As I mentioned, in this business, we go to market in 2 ways, both of which leverage our leading Global Banking and Markets franchise. All of our clients, regardless of their size or their industry say the same thing. Our capabilities are differentiated. We even hear this from the largest and most sophisticated technology companies. And that's why we've been able to break into an industry with a long sales cycle after only a few years. We're a growing player in a large market that has attractive margins and de minimis capital requirements. And we're already profitable after only 3 years. And that's why this is a business we will continue to scale. Previously, we had set targets focused solely on growing deposits and revenue. Now is the right time in our growth trajectory to further deepen our focus on the quality of those deposits and revenues. And so like our competition, we will no longer have targets that simply focus on top line growth. I mentioned that long sales cycle earlier, and you could see what I mean if you look at the funnel on the right-hand side of this slide. We begin most of our relationships as a secondary provider. This gives us access to funding that's less expensive than the capital markets, but the cost tends to rise along with interest rates, and there's limited opportunity for payments revenue. Serving as a secondary provider is a place where you start with a client when you're new to an industry, but we're now at the place based on our technology and our other capabilities where we can move down the funnel and grow into the primary provider status, which will increase the quality and the stability of our deposits and our revenue. And we know we can win this type of business. Last year, American Airlines selected Goldman Sachs Transaction Banking as its primary payables bank, and we look forward to ramping up with them later this year, along with going deeper with many of our 450 clients. Over $300 million in revenue and our positive income, coupled with an approximately $70 billion in year-end deposit balances prove that we have the foundations of an attractive platform, but we need to take it to the next level. I started my career serving corporate clients in our investment bank. And we have to do in transaction banking, where I remember doing every single day in investment banking, increase our wallet share with existing clients and onboard new clients. We have a lot to do to execute on this strategy, and we know that it will take persistence. These stable, more recurring and high returning revenues require long sales and implementation cycles, but they're highly valuable once you win them. Now let's turn to enterprise partnerships. In just a few years, we've developed a set of capabilities that are particularly well suited to powering the world's largest corporations as they seek to offer financial products in their ecosystems. We currently serve 12 million active customers, and our 2 primary partners touch over 100 million customers every single day, giving us ample opportunity for future growth. Empowering these large brands, we help to reduce the inherent complexity associated with offering financial products via a modern, agile tech stack and a large stable balance sheet. And unlike most, who offer a co-branded credit card, we endeavor to be a multiproduct with our clients. This year, we are working towards the launch of savings for Apple Card, which will allow customers to earn interest on their daily cash through a savings account that is powered by Goldman Sachs. We're also embedding our products where our partners do business. We've integrated the GM card across their dealership network. So upon approval, customers can get an instant digital card for things like a down payment, accessories and more. We have award-winning products and enterprise partnerships and have experienced tremendous growth, but profitability has been challenged by the reserve build and the lack of a scaled credit card platform. This year will be an inflection point for us. For the first time, we expect revenue net of PCL to be positive as the increase in charge-offs is offset by revenue growth and the decline in the change in reserves. We've made substantial investments, and we continue to take actions that will help us to navigate a potentially complicated credit environment. That said, this is a business that is impacted by the macroeconomic cycle. Our year-end reserves assume a weighted average unemployment rate of 5.5% to 6% in 2024. For every 50 basis points change in the unemployment rate, we expect the impact to PCL in 2023 to be approximately $150 million. We're also highly focused on driving efficiency. We will begin to realize the benefits of an adjusted contract with Apple in the second half of this year. But we know we still have more work to do. We have opportunities to optimize the customer and agent experiences and better leverage fixed costs. Now on to merchant point-of-sale lending, which we acquired as GreenSky in March of last year. In many ways, the goals for this business are the same as the goals for enterprise partnerships. We help merchants embed financial products in their ecosystems so they can grow their businesses. The difference is that our client is generally a home improvement merchant rather than a large corporation, and we work with thousands of them. The magic in this business is that large, stable, diversified merchant network that was built over more than a decade. And the chart on this slide shows just how sticky and valuable those relationships really are. Since the acquisition, I've traveled around the country, visiting our merchants and I consistently hear how GreenSky is an important part of their growth. It's that merchant network, along with our bank funding that allow us to originate assets at attractive returns. And we like these assets. The borrower is a homeowner with a high average FICO score of approximately 770 and the marginal returns are accretive to Goldman Sachs. However, we only began originating these loans on our balance sheet 6 months ago. Currently, we have over $2 billion of GreenSky loans on our balance sheet, while we serviced approximately $10 billion of total loans in 2022. So business is not yet at that same inflection point as our enterprise partnership business. We expect it is about 1 year to go before revenue net of PCL is positive. And the true steady state, it goes beyond this chart. That will happen when the balance sheet approximates 2 years of originations. This year and next year, we expect to invest pretax dollars in the reserve build that comes with building the on-balance sheet book and work through deal-related expenses. Interestingly, the most important factor driving the timing of profitability in this business is our growth. GreenSky has been experiencing significantly higher growth now that it is part of Goldman Sachs. If our growth rate continues to exceed expectations, it will create a more attractive steady state, but will also mean a delay in reaching profitability. We are laser-focused on ensuring that the loans we originate are high quality from both the returns and a credit perspective. The last few slides are focused on revenue, net of PCL and the impact of the reserve build on our profitability. Our efficiency ratio is an equally important lever to achieve profitability. And we've been demonstrating progress on this over the last year. In the early years, we were subscale and investing in the foundations of a platform. So our efficiency ratio, understandably was well in excess of 100%. And this is not a metric where you want 100%. We're at an inflection point here as well. Last year, the efficiency ratio, excluding deal expenses, dropped below 100%. We expect this trend to continue, and by the end of this year, we expect to be at a total efficiency ratio well under 100%. The key drivers of this improvement are things we believe we can manage directly. Net revenue growth, lower deal-related expenses and improvements in customer interfaces and investments in automation that will drive down the cost of servicing our customers. While nothing is ever a straight line, we are making progress on our path to profitability. We are focused on: number one, growing fee revenue and high-quality deposits; number two, managing the growth of the more asset-intensive businesses and consumer platforms; number three, realizing the benefits of scale by better leveraging fixed costs; and number four, managing through a potentially complicated credit environment. We're working to reduce net losses by hundreds of millions of dollars this year. By 2025, we project that we will be breakeven on a pretax basis and continue to improve our efficiency ratio. And over the longer term, we are fully committed to delivering returns consistent with the firm's targets. We recognize that it's important for you to be able to track our progress, so we'll regularly provide updates as we drive towards profitability. Profitability is not our strategy. It is a priority and the outcome of a strategy well executed. With that, my guess is you need to stretch your legs and take a break. And after that, you'll hear from Dan Dees. [Break]

All right. Welcome back. Good morning, everyone. I'm Dan Dees, I am the Co-head of the Global Banking and Markets business, along with my partners, Ashok Varadhan and Jim Esposito. I'm in my 31st year at the firm, having started in the investment banking analyst program way back when in 1992. I've been in 5 offices all around the world, built my career across a variety of businesses. And today, I have the privilege of spending the next 20 minutes talking to you about the Global Banking and Markets business. And talk about what makes this business special, what's changed about this business and importantly, what we think this business can deliver going forward. So let's jump right in. We integrated the #1 investment bank in the world with the leading FICC and Equities franchise. And the result is, as David and John alluded to earlier, this outstanding business that we call GBM. This is a business distinguished by its scale, its profitability and its leadership position. $32 billion of revenues, $14 billion of pretax. We used 65% of the firm's capital in 2022 and generated a 16.4% return on that capital. This is a business that is winning, #1 in M&A, #1 in equities, #2 in FICC, those leadership positions have been built over decades of investment and are a fantastic reflection of the confidence and the trust that our clients have in us. We definitively benefit from having the best brand in the business and the power of that brand proceeds us into every one of our client interactions and adds real stability and durability to those leadership positions. And importantly, we have the best people in the business. We have over 250 partners in our GBM business. Globally, this is a group that has seen everything and importantly, has executed successfully against every type of market backdrop, competitive backdrop, regulatory backdrop. It's an extraordinary group that Ashok and Espo and I feel privileged to lead. I want to orient the discussion today around 3 things that are different. Three things that have changed about this business versus how people used to think about this business. And I think these changes are important and I think they make a meaningful and positive impact on how valuable this business is for our shareholders and how valuable this business is for our clients. Number one, we've strengthened our client franchise that has allowed us to increase our wallet share, which has allowed us to raise the floor on our business and raise the upside. We've increased the durability of our revenues, and we've raised our return profile. I'll organize my comments today across those 3 things and dig in deeper to each. Let's start with the strength in client franchise. As John alluded to earlier, in 2019, we were a top 3 service provider to 51 of the top 100 accounts in FICC and Equities. And today, we are a top 3 service provider to 77 of the top 100 accounts. In banking, we expanded our footprint from approximately 9,000 clients to approximately 12,000 clients. With the successful execution of those initiatives and other initiatives, we were able to increase our wallet share by 370 basis points. That's over $3 billion of incremental revenues to our business. These gains are meaningful. We believe these wallet share gains are sticky. We have no intention of relenting or retreating on these wallet share gains. We have every intention to continue to grind these wallet share gains higher in various pockets of our business. Now what we did is important, and so I want to spend a minute and talk about what we did and importantly on what we're going to do going forward. So the first thing we did on the FICC and Equities business, we established a framework for the top 100 clients. This is a group that is large. It's over $6 billion of revenues to us. It's a growing wallet. And in many ways, it's a recurring revenue stream for us. And importantly, this is a group of clients that have increasingly complex needs, and in many cases, are looking to consolidate the number of banks that they pay. And that plays very much to our strength. And I think it's an important change in industry dynamic that I'll try to bring to life a little bit by giving you an example. In today's market, if you want to compete to be a leading service provider to one of these large clients, let's pick a large multi-strat hedge fund as an example, you have to be a consistent provider of financing to them. But equally importantly, you have to be able to cover them comprehensively around the world. You have to be strong everywhere that they want to be strong. So you have to be strong in U.S. equities, but equally, you have to be strong in Asia equity capital markets, European rates, Latin American distressed debt, index or inflation swaps, the European power and on and on. This is exactly how Goldman Sachs has built itself. There are only a small number of players around the world that can provide this level of service. This is an industry dynamic as a result, that plays to our strengths. It's an industry dynamic where the strong are getting stronger. So again, we established this framework. We identified the top 100. We assigned ownership. We identified gaps and issues all around the world in every product, every sector, every region, figured out where we needed to lean in one place to benefit another place. And the results are what you saw. We moved our top 3 positions to 77 of the top 100. So what are we going to do next? This is clearly a framework that's working. It's a process that's working and so we're going to do exactly what you would expect us to do. We're going to extend this top 100 framework to the top 150, and we will lift our aspirations from top 3 to top 1 or 2. And yet we're going to do this in exactly the same way we did the top 100, which we're going to do it, mindful of our return profile. There will be places we're moving from #3 to #1 with an account doesn't make sense economically. So we're going to do this always with the premium, we're going to grind these wallet shares higher, always with a premium placed on generating attractive returns. Now let me talk to the investment banking franchise and how we strengthen that client franchise. As I mentioned earlier, we went from -- we expanded our footprint from approximately 9,000 clients to approximately 12,000 clients by going down into the middle market. We found that our brand and our expertise naturally and successfully extend into that client set. And with that initiative and other initiatives, we were able to increase our wallet share. But I want to spend a minute on our M&A business, on our advisory business because I think it highlights the strength of our client franchise. John alluded to it. David alluded to it. Marc also alluded to it, we're pretty proud of it. But we finished the year in 2022, where we were #1 in advisory revenues for the 20th straight year. I do want to pause on that. I don't know if any other service business anywhere in the world of this size, of this competitiveness where one firm has been #1 for 20 straight years. It is a fantastic reflection of the strength of our client relationships, the strength of our brand, the quality of our people and the quality of the advice and the execution that our people give to our clients that keeps them coming back. And this is a business, just like the FICC and Equities business that I just referred to, where the strong are getting stronger. M&A is an experience-based business, where the more you do, the more experience you get, the more valuable you are to clients, and therefore, the more you get to do. It's a virtuous circle. So we have every intention to lean into that momentum, lean into that strength. This is another place where we want to grind our wallet shares higher. Now by definition, the relationships in this business are trusted adviser relationships. These are such a valuable and treasured asset to Goldman Sachs. This connection, this network, this trust is such a valuable and treasured asset to Goldman Sachs across thousands of corporate and sponsor relationships. The value of that treasured asset obviously shows up in the $13 billion of revenues over the last 3 years, $3 billion greater than the #2 firm. But equally, over time, the real value of these trusted adviser relationships is going to be the opportunity to open these up to the firm in the way that Kim talked about earlier on the One GS discussion. The opportunity to open these up to financing and transaction banking and private wealth and workplace and personal wealth and on and on. We've done a good job already on the One GS side. We have hundreds of referrals back and forth between GBM and AWM and vice versa. But I truly believe we're just getting started in terms of our potential of opening these adviser -- trusted adviser relationships up to the firm. Now I want to stay on our client lens for a minute, and I want to talk about the power and the rationale of bringing these businesses together, integrating the #1 investment bank with the leading FICC and Equities franchise and how by being together, we can better service our clients. And the lens I want to use is the alternative asset managers. This is an incredibly exciting client set. It's huge and growing $15 trillion, trillion with a t, of assets under management in 2022, growing to $23 trillion over the next 5 years. This is a staggering reminder of the scale of the markets in which we operate. This is an exciting secular growth opportunity for us. By definition, it is transactional capital. That's what these clients do. They transact. They use our services to transact. And importantly, all of this growth in assets under management needs to be financed. And this is happening at a time where growing our financing business is a strategic priority for us in GBM. So this is a happy intersection of client need, business opportunity and strategic priority for us. So how by coming together, how by bringing these businesses together into a GBM, can we better service this client set, increase our wallet and increase our returns. The easiest way to think about it is across 2 vectors, 1 coordinating coverage better and the other optimizing resource allocation. On the coordination of coverage, we already have multiple examples of where our C-suite connectivity in Investment Banking matched with our structuring and distribution expertise in FICC and Equities has led to increased opportunity. As a result of our relationships with the tops of these firms, we were able to understand their desire to identify alternative sources of capital to access for their GPs and funds. We matched that insight with the distribution and structuring acumen that we have, and we're able to create new and innovative ways for them to access capital across their GPs and across their portfolios across a variety of markets. By solving this problem, we created wallet. We didn't take wallet share from another bank, we created wallet. We now have a $300 million plus fund finance business where before there was 0. This is one example how going forward this better coordination is going to allow us to better service the client set. Optimizing resource allocation, the easiest way to think about that is the following: constrained optimization is what we do. We live with limits and constraints. Our constraints are primarily around the scarce resources of our human capital and our financial capital the way that we allocate that capital, dictates the experience our clients have with us, dictates our revenues and dictates our returns. If we can do that in a more optimal way, we can build a more optimal business. Historically, we've allocated our capital across this client set and oftentimes across the same client in a more siloed way. We allocated our revolvers in investment banking. We allocated our NAV loans in global markets, and we allocated our subscription lines in asset management. Each of those allocations made sense in the silo in which it was made. But now we have an opportunity to step back, widen the aperture by bringing these businesses together and determine how best to allocate our capital that optimizes the clients' experience with us and maximizes our chance for wallet and returns. Again, getting this stuff right is important with just this client set. Every 100 basis points of wallet share is over $500 million of revenues. And this is just one of the clients that's where this type of activity can be to our mutual benefit. So I talked about strengthening the client franchise and the power of being together as a GBM. Now I want to talk about the increased durability of our revenues. One way in which we have adapted our business to increase the durability of our revenues is to increase our financing revenues. Increasing our financing revenues, as you heard from David and from John, in our GBM is a strategic priority and it's a strategic priority for 3 reasons. Number one, our clients want more of this from us. Number two, we're able to do it at attractive returns. We're at a point in time in the markets where the need for capital and need for financing is outstripping the supply financing in many pockets. So we're able to put on these financing commitments at attractive returns. And number three, the more of this we do, the more durable our revenue stream becomes. As you can see, what we've achieved, we were at $2.6 billion of financing revenues 10 years ago. We're now, in 2022, over $7 billion with an intent to be higher this year and higher in the years ahead. As you see in the dark blue on the slide, the growth has come from equities financing, which is really growth in synthetics within our prime business and a deeper penetration of our systematic clients, which you'll remember from our Investor Day in 2019 was a strategic priority. And in the light blue, the growth has come in the FICC financing business, mostly through the growth of asset secured lending, where we've seen real growth in that marketplace and an expansion of the products we offer in our portfolio. Importantly, this growth is happening at attractive returns. The industry dynamic I referenced earlier, where our ability to deliver for our clients across region sectors products is only deliverable by a small handful of firms in a comprehensive way and is really valued by our clients. That is reflecting itself in a pricing environment for our services that is more healthy, more balanced, more attractive, and that's an important change. You can see we're now at 22% of our total revenues in financing. We have room to grow that. We have opportunity to grow that. We have intent to grow that. And I'll say the same thing about the growth there that I said about our wallet shares earlier, which is we intend to grow it, always mindful of having a premium on attractive returns and mindful of our risk management framework. Another way to think about the durability of our business, historically, people have viewed this business as volatile and, therefore, harder to predict, harder to project and harder to value. They viewed it as volatile because they look through the component pieces of the business and the volatility of the markets in which we operate, and they assume that, that volatility translates to the overall business. We think the reality is more nuanced than that, and we think the reality has changed. And so I'll walk through the 3 reasons why. Number one, as we grow our financing revenues in this business, we grow the durability of our revenue mix. Number two, our people continue to outperform in every market environment. Despite the volatility of the markets in which we operate, our people have captured the opportunity born of that volatility year in and year out. That's a hallmark of Goldman Sachs. We expect to continue and hope to continue to perform in that way. And number three, by bringing these businesses together, by bringing together investment banking and the FICC and equities business, you start to see the natural diversification offsets of this business. The same volatility that is a headwind in any given year, that slows down our underwriting business, for example, is the same volatility that can be a tailwind in that year to our macro and FICC intermediation businesses. And I'll show you that graphically. Let's go back and look at the 2013 to 2019 period as a period leading up to the present that experienced some volatility. This was a volatile period as you had the onset of quantitative easing, you had 0 interest rates, you had new regulatory frameworks with Volcker and leverage lending rules. You have the rise of the boutiques, the rise of the multi-strat, multiple booms and busts in markets all around the world. And here, you see a graph of the performance of our FICC intermediation business, and it displays some of the volatility that we experienced in the -- in that market backdrop. Over that same time period, we can look at our underwriting business, again, has some of the volatility that reflects the volatility of the market backdrop. But when you put these businesses together and put them together with a broader GBM portfolio of businesses, you see what I said earlier, a more stable and durable picture where, again, the volatility that proved to be a headwind to certain businesses is a tailwind to others. More importantly, what does this mean going forward off this durable base? Of the $22 billion that we talked -- that I just showed on 2019, a couple of important things have happened. Number one, as I just spoke about earlier, we've added $3 billion incrementally, more than $3 billion of incremental revenues by gaining wallet share. As I said, we have no intention of retreating, no intention of moving backwards. We have every intention of moving this number up, and this number has effectively helped us raise the floor off of that 2019 and before level. Number two, we've added financing revenues. Again, this is a strategic priority. We have every intention of continuing to move this number up. We've added $3 billion of incremental revenues versus that 2019 period, again, along with the wallet share gains, serves to raise the floor on our business. When you then fold in the rest of the Global Banking and Markets business, what you see is a business that is just fundamentally larger than it was in the past. The successful execution of these 2 initiatives, plus the performance of our best-in-class intermediation and banking franchise, has driven this growth. When you look back over that time period and you think about the different market themes that we dealt with, the onset of the pandemic, the policy response, the recovery, the onset of inflation, the policy normalization, across all of that, every vertical in every region, from rates to currencies to credit to commodities, mortgages, prime equity, equity derivatives, all proved invaluable to our clients. And on the investment banking side, whenever corporates or sponsors needed best-in-class M&A execution or debt underwriting or equity underwriting, our franchise paired the best. In some ways, we've built a business model that's designed to capture the upside volatility in the world without being as volatile ourselves. And what you see here with this performance is just a fundamentally larger business with a more durable revenue profile and a raised floor. Now let me touch on the last of the 3 things that I think have changed versus how people used to think about this business, and that is our higher return profile. When we spoke to you last time at the Investor Day, we were a lower return business, both on an absolute and a relative basis. Since that time, we've done the things we said we were going to do and the things that I've talked about in this presentation and things I've written on the right-hand side of this slide, we increased our revenues, we gained wallet share, we improved our business mix, we took out cost and we improved our capital efficiency. And now we sit, again, using 65% of the firm's capital last year and generating a 16.4% return on that capital. We're proud of it. We're proud of it on an absolute basis. We're proud of it on a relative basis. Our next best peer was 14%. The average of the peers was just under 13%. We have every intention to continue to generate these mid-teens returns. There are places in our business where we'll grind those returns higher, and there will be natural offsets in more difficult markets to those returns. But we think we have fundamentally built a business that has a more durable return profile. And I'll leave you on this slide. We have the preeminent Global Banking & Markets franchise. It is a powerful foundation for the firm. We are proud of it. We are proud of our client franchise. We have leading market positions and a strengthened client franchise that is really the core of who we are. We have best-in-class intermediation, and the combination of our enhanced wallet shares, our improving business mix and our competitive advantage is our people, our brand and our scale have led to a business with a meaningfully raised floor that is more durable on a revenue and return basis. We're going to keep grinding higher and grinding further. I will just say on behalf of all the people of GBM, thank you for your attention today. Ashok and Espo and I are incredibly excited to be the stewards of this great franchise at this exciting time. So thank you. And with that, I'll turn it to Denis Coleman.

Thank you, Dan. Our ability to achieve our targets and unlock shareholder value. 3 years ago, we laid out a strategic plan to strengthen our businesses, diversify our products and services and operate the firm more efficiently, so we could ultimately drive higher returns for shareholders. Over this time frame, we've expanded our client footprint and have grown more durable revenues, such as NII and management fees. While I acknowledge that we still have more work ahead of us, our diversified set of global, broad and deep businesses have helped us drive solid results across different market environments. We have a proven track record of dynamically navigating a wide range of such environments and remaining nimble with an unrelenting focus on our clients. The past 3 years have been marked by a global pandemic, high inflation and tightening monetary policy, a ground war in Europe and ongoing macro uncertainty, which only reinforces the importance of our strategy to build a more resilient and diversified franchise, elevating the structural return profile of the firm. Since our first Investor Day, we've increased our book value per share by 39%, while returning capital to shareholders and investing to strengthen our franchise. We are operating from a position of strength with a clear focus on the path forward. Foundational in these efforts is a strong risk management orientation. Our deeply embedded risk management culture underpins our long-term client-oriented strategy. This comprehensive risk foundation has been built through many years of tremendous dedication. There are 3 key elements to our risk management philosophy. First, risk management is an integral part of the DNA of the firm, and it's at the forefront of everything we do. We differentiate ourselves through a disciplined risk reward approach and by empowering risk managers and risk takers who are deeply experienced and ingrained in our longstanding partnership culture. Second, our risk infrastructure includes 3 lines of defense, ensuring accountability for risk generating activities and providing independent oversight. From a process perspective, we employ extensive scenario analysis and stress testing as well as limit structures and rigorous approvals. This has been bolstered by our longstanding mark-to-market discipline, which provides helpful transparency, both to our business leaders and risk managers and to me as CFO. Third, we remain committed to consistent improvement of our processes, incorporating learnings from our experience to dynamic environments, and we constantly aim to prepare for new and emerging risks. This risk framework underpins the execution of our strategic priorities. Successful execution of these priorities will drive better outcomes for the firm and for all of our stakeholders. In Global Banking & Markets, we'll continue to maximize our wallet share and grow financing activities to fundamentally raise the floor of the business and will help us maintain strong returns through the cycle. Specifically, we are focused on expanding our top 3 initiative in FICC and equities to include more clients and improve our share with existing clients. We're also focused on disciplined growth in financing activities and continuing to strive for market-leading rankings across our advisory and underwriting businesses. In Asset & Wealth Management, we have an increased focus on both market penetration and investment results, with the priority to grow management fees and expand our margin. These actions will help us generate high single-digit fee and NII growth and a pretax margin in the mid-20s. At the same time, we are reducing our on-balance sheet investments, which will improve the capital density and return profile of that business. Lastly, in Platform Solutions, we are committed to achieving profitability. As Stephanie mentioned earlier this morning, we recognize that these various businesses are at different inflection points in their growth trajectories. We expect to demonstrate progress to breakeven this year and are targeting pretax breakeven in 2025. Over the next several slides, we'll shift our discussion to the overall management of our financial resources. Starting with capital, Goldman Sachs has a history of prudent capital management, and our philosophy remains unchanged. We prioritize investing in our businesses at attractive returns, sustainably growing our dividend and returning excess capital to shareholders in the form of buybacks. We remain focused on optimizing capital consumption and driving down the capital density across the firm. Over the last several years, we grew our balance sheet in support of client financing activity. And as the market environment and the opportunity set changed in 2022, we demonstrated our ability to remain nimble and subsequently shrank our balance sheet, optimized and reduced our RWA footprint and manage down our G-SIB score to our target of 3%. At the same time, we have continued to evolve our business mix with a focus on reducing the stress intensity of our business, and we've begun to see the impact of these efforts, resulting in a lower SCB requirement in 2022, the only U.S. bank amongst our peers who received a reduced SCB requirement, despite a more challenging stress scenario. We continue to remain focused on reducing our SCB towards 5%, and one of the most consequential things we can do in this regard is to reduce our on-balance sheet investing activities. We have reduced these investments by $22 billion since our first Investor Day. As Marc described earlier today, we are focused on continuing to reduce these positions, targeting less than $35 billion in the medium term. Although we still await crucial feedback with regards to Basel III revisions, we believe we're well positioned to meet the new standards as we have dynamically operated in regulatory environments for a long time. The earnings power of our franchise has allowed us to grow our businesses as well as accelerate capital return to shareholders. Prior to our first Investor Day, the firm had focused on maximizing the return of capital to shareholders, and we operated with an average gross payout ratio north of 100%. Since then, we've been in an investment period, during which we deployed capital into our businesses to improve the structural resilience of the firm as well as executed several small but strategic acquisitions. As a result, our average gross payout ratio more recently has been just under 50%. Also during this period, we doubled our quarterly dividend. This increase in dividend is supported by our confidence in the resiliency of our earnings power. Given our more narrow approach to investment spend, we're in a position to reprioritize returning capital to shareholders. Starting last year, we accelerated our pace of buybacks, ramping repurchases from $500 million in Q1 and Q2 to $1 billion in Q2, (sic) [ Q3 ] $1.5 billion in Q4. And with our capital ratios in excess of our target range, we've already repurchased approximately $2.25 billion this quarter. Additionally, our Board has authorized a multiyear share repurchase program of up to $30 billion, providing us with additional flexibility. You should expect us to continue to focus on share repurchases, while also sustainably growing our dividend. In addition to capital, we're committed to expense efficiencies as part of optimizing our financial resource footprint and are actively engaged in expense mitigation efforts. We've identified in action several expense savings initiatives that will allow us to dynamically manage our expense base over time and will enable us to mitigate inflationary headwinds and reinvest back into our core businesses. First, in order to rightsize the firm, and as we discussed on our fourth quarter earnings call, we conducted a headcount reduction exercise earlier this year. Additionally, we are curtailing the replacement hiring of normal course attrition and instead focused on prioritizing strategic hires and refilling critical roles. These actions are expected to result in $600 million of run rate payroll reduction. Next, on non-compensation related expenses, we have set guardrails for our business leaders to drive more efficiency in non-compensation related spend, with targeted reductions in areas such as professional fees and advertising. Additionally, as we execute on our on-balance sheet asset disposition strategy, operating expenses associated with our consolidated investment entities will also reduce. Combined, we expect to generate over $400 million in run rate non-compensation expense efficiencies. The impact of these initiatives will become more fully reflected over time, with approximately 50% in 2022 and the remainder in 2024. We have chosen to take all of these actions because we remain highly focused on running the firm with a 60% efficiency ratio. Turn now to spend a moment on funding. We have been on a multiyear journey to optimize and diversify our funding footprint. We have built out multiple strategic deposit-raising channels, including private banking, consumer and transaction banking platforms. And through these channels and others, we have been able to greatly diversify our funding profile by increasing the relative proportion of more stable deposits compared to other unsecured funding alternatives. Since Investor Day 2020, we've grown deposits by nearly $200 billion. They now comprise more than 50% of our unsecured funding mix. We expect this trend to continue, as we optimize activity in our bank entities. Organically grown our bank entities through strategic asset growth and lending, and we now have approximately 34% of the firm's assets in our banks as at year-end 2022. This compares to approximately 25% at Investor Day 2020. We have also streamlined our bank entity structure globally through the integration of the firm's EU bank entity, GS Bank Europe, allowing us to migrate additional bank-eligible activities into our bank and better utilize our deposit base over time. Ongoing disciplined growth in our bank entities represents a substantial opportunity to the firm to further improve the diversification and stability of our funding base and lower our cost of funding over time. I would now like to pull together the financial impact of these actions that we've all laid out for you. On this page, I use a simulation to demonstrate what these actions would have accomplished with respect to last year's performance. We start with 2022, the lowest point in the last 3 years. First, we continue harvesting on-balance sheet investments, which is coupled with a normalization of investment income to around $2 billion, well below historical averages. Taken together, these items have combined impact to our ROE of approximately 150 basis points. Next, our 2022 results were impacted by a $1.7 billion loss in Platform Solutions. The reversal of this loss would yield an improvement of an additional 150 basis points. And lastly, as we improve these businesses, we intend to operate more efficiently, which would uplift our ROE by another 75 to 125 basis points with room for further improvement. Importantly, this is meant to solely demonstrate the impact of these specific items laid out above. It does not take into consideration any additional market-related tailwinds or headwinds for our businesses. There are many levers to consider. And of course, some of these actions will be multiyear efforts. However, these discrete items demonstrate a clear path to our 14% to 16% return targets and should give you confidence in our ability to achieve them. Ultimately, we are building a more durable franchise to generate higher returns through the cycle. And finally, we have an investor aligned management team driving the firm forward with a relentless focus on our 3 business priorities. We are committed to transparency and expect to be held accountable. We are well positioned for the future, in large part, based on the strategy we've been executing over the last 3 years. We are operating from a position of strength, have growth opportunities in front of us and are focused on continuing to deliver for our clients and delivering shareholder value. Thank you all very much. I will now turn it over to Carey.

Good morning. I'm not sure anyone is more excited than I am to have you all here today, so thank you for coming. You've heard from us this morning about our focus on the forward. We have made substantial progress on our strategy since our last Investor Day, but there's more work to do. Our goal is to not only grow and diversify the firm, but to do so in a way that positions us to deliver differentiated returns to shareholders. Before David returns for Q&A, I want to spend a few minutes on a simple question, why should you invest in Goldman Sachs? When you invest in us, you're investing in our strategy, in our people, our culture, our client franchise, the qualities that our clients tell us time and time again differentiate us from our peers. In my view, there are 3 key reasons to invest. First, we have a clear strategic direction for our firm and for each of our businesses. We've laid these out for you this morning, and I'll review some of the key takeaways in a moment. Second, we have a differentiated client franchise, differentiated talent and a differentiated culture, and we're leveraging these strengths to drive our strategy forward. And third, we're demonstrating a track record of success. In the last 3 years, we've increased shareholder value by growing our book value per share and delivering returns that are well ahead of the peer average. And our long-term track record is strong. As you all know, we laid out a clear strategy in 2020. This morning, you heard how our strategic reorganization will bolster our execution of the strategy and capitalize on our strengths and dial-in on our 3 priorities. You've heard it a few times, but I'm going to repeat it once more. We're maximizing wallet share and growing financing in Global Banking & Markets. We're growing management fees in Asset & Wealth Management. And we're scaling Platform Solutions to deliver profitability. Let me spend a moment on each segment to sum up what you heard today. The integration of our #1 investment banking franchise with our leading FICC and equities businesses positions Global Banking & Markets to continue delivering strong returns. As Dan spoke about, we're focused on capturing share, particularly in favorable environments with a continued eye on resource discipline. The size, breadth and diversification of our mix of activities have driven relative stability in revenues over time. Our share gains and higher financing revenues over the past few years have further increased durability. This is a great business, and we are delivering for clients at the highest level. In Asset & Wealth Management, our franchise benefits from the Goldman Sachs ecosystem that gives clients access to a wide breadth of products and solutions as well as our unique market insights and expertise. As you heard from Marc and Julian, our priority is investment performance and client experience, which will drive a more durable revenue stream from fees and private banking and lending. We will keep ourselves accountable by introducing new medium-term targets on revenue growth, margin and ROE. This is the area where we have the most significant growth opportunity, and we were already operating at a position of scale. And in Platform Solutions, although this segment remains small in the context of a broader firm, we see potential from these emerging businesses. As Stephanie outlined, we have attractive businesses that provide stable, more recurring fee revenue and net interest income revenue. And we offer innovative tech forward products for our customers. And importantly, we have a plan to unlock shareholder value. So now I want to focus on why we have conviction in our ability to execute on these strategic priorities. What started as a one-person operation in Lower Manhattan in 1869 is now a Fortune 100 company and one of the leading financial services firms in the world. Our clients view us as their trusted adviser, and they know that we will deliver to them the best possible results. As you heard from Kim, One Goldman Sachs has been successful well beyond our expectations, proving that the strength and breadth of our global client relationships are key drivers of the execution of our strategy and continued performance. What ultimately drives this unparalleled franchise is our people, some of whom are sitting here in the front today. We have great people. We have a differentiated culture. Each of these is important on their own. But together, they're extraordinary. I'm not saying that it's perfect or always easy, but what we have is special and enduring, particularly through periods of challenge and change. I know this topic is important to many of you. We've discussed it over the years, and it's top of mind for you when you think about the success of our firm. One marker is being recognized in the top 20 of Fortune's most admired companies in 2023 and for 15 years running. And the pipeline for the firm is stronger than ever with a 300:1 application ratio for open positions in 2022, even higher than in previous years. As you heard David say earlier, we know that we cannot take for granted the strength of our culture. It requires continued investment, dedication and focus from all of us here at the firm. Another element of our strategy is our commitment to transparency, accountability and alignment. This is just as important to us as our business level targets. We've made a conscious effort to be open and accessible with enhanced disclosures, more frequent investor conferences and regular strategic updates. And we've continued to lay out our targets for our firm and for the businesses, and we provided you with robust disclosure of KPIs, so you can measure our progress. And finally, we made important changes to better align employee incentives. All of our management committee members now receive 100% of their annual stock-based compensation in performance-based shares that are earned based on forward results. This was a purposeful change intended specifically to enhance collaboration and fully align the entire leadership team with long-term shareholder value creation. And beyond that, many of our employees are also shareholders, and we want to make sure we all have the same goals in mind to drive shareholder value. The next slide shows our track record of success. We've been a public company since 1999. Many of you in this room have been covering us or have been shareholders since that time, and we say thank you. One of you once told me that you have been covering Goldman Sachs since before our IPO. Extraordinary. Okay. But over these 23 years, we've successfully navigated a series of major market events. We've adapted to various operating environments, and we have delivered an average ROE of 15.3%. Some of you might say that a 23-year holding period is a bit beyond your investment horizon, and I get that. So I'll give you another stat. In the last 3 years, our average ROE was 14.8%, and this was in line with our targets and 320 basis points higher than the peer average. And if you exclude the impact of litigation in 2020, that 14.8% would be 130 basis points higher. This strong performance delivers for you, our shareholders. Since 2019, our book value per share has grown by nearly 40%, 2.5x higher than the peer average. During the same time, we've doubled our dividend per share, well above our peers, and our total shareholder return is 60% during this time, 4.5x higher than the peer average. We are proud of these metrics, but we also recognize that there's room to improve because our goal isn't just to outperform some of the peers. Our goal is to outperform all of the peers. So again, the investment case for Goldman Sachs is compelling. We've laid out a clear strategic direction. Our franchise, talent and culture are differentiated. And we're continuing from a proven track record of success. Thank you. We're going to take another quick break, and then David will be back to take your questions. [Break]

Thank you. Again, I just want to echo the thanks of my partners and colleagues. Thank you all for being here and spending the day with us. I hope you found the content helpful. I'm happy to take questions. And by the way, as are John, Denis and others and depending on some of the questions I might call on John Denis or some others. But let's start with any questions that are in the room.

Thanks, David, and thanks again for putting the day together. It's really good to get an update and helpful. So I was -- wanted to drill in a little bit on balancing something with platforms. And I know it's a small business for you all. But you introduced the idea of strategic alternatives for that business. And you're at the same time, pushing forward to breakeven in a business that needs scale. So how do you balance a commitment to the business, which the partners that are going to help you achieve that scale would want with also then, on the other hand, the strategic alternatives. How should we think about that? Where are those lines drawn? And how do you balance that?

Sure. And we have, as we showed you in Platform Solutions, we have three businesses. We've got our transaction banking business. We've got our consumer platforms, which include our credit card business and our point-of-sale lending business. And first, from a start-up perspective, as I said, we've built technologies. We've got partners that are good partners, and we have things that we think have value. And we're obviously executing on making them more valuable to Goldman Sachs. So I want to be clear. I think we've been clear. We will make progress on that. We're not going to let the drag that existed from those platforms continue. I think the statement I made this morning was a very clear statement. We've narrowed our ambitions in the consumer space. And as we now move forward with these platforms in addition to running them better, we will consider strategic alternatives for them. I know that everybody wants a very straightforward, simple answer as to exactly what that means and what that could look like but there are lots of different ways that we could do things strategically that could enhance the operation or something might not ultimately fit strategically. But we'll do what's right for Goldman Sachs. We're focused on it and we'll execute appropriately. Yes, Dan?

David, I just wanted to ask a question on capital. At 2020 Investor Day, you outlined an SCB target of 5%, that ultimately landed closer to 6.3%. Today, you doubled down again on the 5%. I was hoping you can just provide some context as to what gives you confidence in that glide path to the 5%? Why would you achieve it now given the struggles that you've had the last few years in driving that down?

Okay. So I mean I'll make a couple of comments at a high level, but then I'm going to phone a friend and have Denis give you a couple of additional comments. But our philosophy here is there's a major shift in capital allocation of the firm. A significant portion of the capital allocation of the firm has been dedicated to an investing balance sheet. And we've talked about this. John and I looked at this in 2019 and recognized the size and the scale of the balance sheet is specifically as it existed for over a decade, had gotten to the point where, one, it was just very, very big. But two, the regulatory environment was consistently and increasingly making it more difficult to own those kinds of assets in our business, and it had to be moderated. We started on that journey and we made progress on it. We have more progress to make. You have a regulatory environment where the goalposts move around. And I think one of the things we have to deal with as a regulated entity is in each year, that process changes and the view and the lens on that process changes, but I think we do believe that we can materially reduce our SCB if we continue on this journey around capital in the asset management business. And Denis wanted to make a couple more comments on that.

Sure. Just to add to that, and I agree with everything David said. At one point, the SCB was 6.6%, it's come down to 6.3% and we've made progress relative to our peers. We believe that the combination of actions that we've outlined strategically will move us towards that target. We think that is the right target, but we have to execute on these strategic priorities. We have to get down the balance sheet. And ultimately, there is some uncertainty in so far as the test is ultimately outside of our hands. But in terms of the actions that we're taking and the strategy that we're setting and the direction where we're headed, we believe that's the right place to target to the firm.

Yes. Mike?

Mike Mayo with Wells Fargo Securities. Tell me where I'm wrong with my thinking here. I guess I see this as good, bad and ugly, the good you're killing it 70% of the firm. I get it. The bad is simply the Asset and Wealth Management because you haven't -- what took you so long to bring down those on balance sheet investments, which are a drag on capital, dragging your ROE. But really, the ugly in terms of Platform Solutions and Consumers. So why don't you just call it today with point-of-sale financing and the credit card relationships merged the transaction banking with GBM and just get beyond the stage. I think Michael Jordan playing basketball in the early '90s and then he went to the major leagues or is the minor leagues. He eventually gave it up. And so you're like one of the greatest of all time in what you do in your core business, but these extracurricular activities have really hurt your reputation, hurt your financials, and it seems like you took too long to kind of cut some of your losses. So where is my thinking wrong there? Or do you agree?

Well, I certainly don't agree with the good, the bad and the ugly. Look, Mike, I know and I appreciate it's one of the things I really enjoy about our interactions as you always like to frame questions and try to make them provocative. I'll try to give you an answer that's substantive to a provocative question. First, I would describe that we have really extraordinary good, okay? And then we haven't executed well on parts of the third and are working very aggressively to correct it. But in the overall substance at scale of Goldman Sachs, it's relatively small. I won't, for a minute, say that it's not meaningful, and we're not focused on it, but I think it should be kept in perspective with respect to the overall. What I really disagree with you is on the bad. I think the work that we've made over the course of the last 3 to 4 years, first of all, to take -- and this is in a big organization, this is not an easy thing to take multiple businesses that were different and were never run together to bring them together and create a leadership structure to set it up as a platform to create internally by pulling different businesses together, the fifth largest active asset management platform with the breadth and scale that you see and getting it operating to get the leadership in place and start fundraising against it and making real progress, I would actually say that's really good. And that doesn't mean we don't have a lot of work to do there. And you saw Marc lay out very clearly the execution prioritization for that, but that is the big mover in the firm. I think one of the things in the narrative that evolved interestingly, I've had a number of people say to me, well, consumer was the growth driver for the firm. I go back to the first Investor Day, we talked about four things that we were going to work on. Four things: Asset Management, Wealth Management, Transaction Banking and the Consumer Platforms. And I've tried to be very transparent and honest with you about how I feel and where we are. I understand your perspective on where you'd like to go. I've made a couple of statements on the fact that we're very focused on it. We're going to continue to drive our core franchises. We'll make the right strategic decisions or the right corrections with respect to the platforms, and we'll move forward. And I truly believe that the kinds of returns and performance you've seen out of Goldman Sachs that have driven the firm for a long time, will continue.

Glenn Schorr, Evercore ISI. So as you pointed out last 3 years -- heck even in the last 23 years, your returns have been within that target range that you're looking for. But even looking at the last 3 years, 2 were well below, 1 was way, way above. So I think the path you outlined was maximize wallet share, grow financing, grow management fees, get platform solutions to profitability. Are those things enough to smooth the cycle some enough to drive multiple maybe in the stock? And then if there's any other color you could add about what you all mean it came up a few times about raising the floor. Are we talking about raising the floor of returns, just looking for a little more detail?

Okay. So a couple of things here that I think are important, Glenn. And in my opening remarks, I recognize we operate in a cyclical business and our core business and core to who we are is going to have some cyclicality to it. I think it's broad, deep and diversified and there are some diversification effects, but it is a cyclical business. I look at 2022, and I actually feel good about the overall performance of the firm given the environment that we were in 2022. 2022, I can certainly paint a worse environment than 2022, but 2022 was a particularly tough environment for a business that's very heavily focused on capital markets, for a business that had a heavy balance sheet in-market assets when you had the S&P down 20 and the NASDAQ down 30, and both fixed income and equities, both down for the first time in over 50 years. But I do think that from the actions we've taken over the last 3 years, we've built a good foundation to create some more stable revenues in our businesses. Let's just look at FICC and Equities go back and talk about FICC and Equities. FICC and Equities were intermediation businesses with a much smaller financing component. We took the strategic initiative to meaningfully grow our involvement and capability to finance our clients. You now have in that FICC and Equities mix. The intermediation is still going to be volatile and have volatility with it, but you now have a big, sizable financing business that still has the potential to grow. That, by definition, creates a diversification effect that makes it less volatile than it was. Not saying that it's going to be smooth as it can be. I'm not saying it's going to have the same smoothness as Asset Management fees, but certainly less volatile. We're growing our asset management fees. Over the last 3 years, we've gone from $6 billion to $8.8 billion and we're headed to $10 billion, and I think we'll continue to go from there. That will create some more stability or durability in the overall mix. But I can't shy away from the fact we're in certain volatile businesses. And there will always be some volatility to that. I think the way to think about it is over a long period of time through the cycle, this firm produces returns, it generates capital, it drives earnings. I think this has been a very unusual 3-year period. I'm not standing up here saying the last 3 years have been normal. 2020, the pandemic, the response to the pandemic what that impact that had on markets, the correction from that and the rebalancing, this has certainly been a very unusual 3 years. But I do believe that consistently over time in all different markets, this firm finds way to deliver on those returns. And we're going to stay focused on that and continue to try to drive things in our core businesses that create a little bit more stability and a little bit more durability as we go forward. Sorry, I can't see all the way back there.

It's [ Merit Whitney ]. Thank you to you and your team for the Investor Day, and I appreciate the color on the 16% ROE guidance. So you've done a great job without [indiscernible] the numerator. I just have a question on the denominator. So are you expecting -- or can you give us any type of guidance on what type of goodwill event you might incur in '23 to achieve that 16%?

I'm not sure I understand the question.

Okay. So if you're making changes in platform, if you're doing other strategic moves, should we expect any change in goodwill that would further enable you guys to have a low bar at 15% or [indiscernible]

We're -- we've got a return target. We're going to manage the return target to the degree we do something that in some way, shape or form in any part of our business affects our goodwill at that point in time, we'll communicate around it. Yes, Chris.

So yes, I think we can all see how wealth management, investment banking, trading and asset management, that resonates how all that hangs together. And we can also kind of see how consumer deposits help. But is there -- what is the strategic connection between consumer lending and the other businesses, if any?

I appreciate -- we're a big bank. We take deposits, we need to deploy deposits. I appreciate that everyone wants more answers on the Consumer platforms and their trajectory going forward. We've laid out very clearly to you that we're focused on bringing them to pretax profitability quickly and are looking at other strategic decisions that we could make to improve the way they're positioned. At this point, there's not -- I would have said more in the presentation, if there was more than I can say. We're going to focus on that. And as there's more to say, Chris, we'll communicate with you. Yes.

Ebrahim Poonawala, Bank of America. I guess maybe just going back to the Asset Wealth Management business. As you reduce some of these assets make it less balance sheet intense, does that improve the ROE profile relative to what you outlined in the mid-teens ROE that Marc talked about?

Yes, it improves. A part of the balance, and I think you know this and we've talked about this before, you've had good you've had good earnings that comes from all the balance sheet when times are good. You obviously have a huge drag when times are tough. As you grow and you scale more client money and you grow and you scale that you can replace that earnings that was coming from the balance sheet directly, but it's much more attractive on a capital basis and an ROE basis. So Marc said to you, here's how we're going to try to manage this. He tried to break down for you in one slide, the economics in terms of where it is on a normalized basis when you take that balance sheet out. And then he said for you, we're going to drive to mid-20s and mid-teens ROE, but he was very clear. That's not our aspiration. So that business, as it scales with more client money, can be a very, very attractive business, but we set out a reasonable perspective for how you should think about the returns. But again, I'd like to amplify. If you believe that's a reasonable achievement, not an aspirational achievement for that business and you look at our core banking and markets business, you're looking at 95% of the firm that drives mid-teen returns that should help you understand how we think about our targets.

And just on that, the incentive fees, I think Marc laid out for normalized, what needs to happen? Like are relatively flat markets where you get back to those normalized rates?

Marc gave -- again, you've got to think about incentive fees, not on a quarter-to-quarter or a year-to-year basis. Marc said that the expectation was 11% for equity, 9% to 10% for debt returns that certainly is conservative in the context of what historical returns would be, but that's what was used in the context of that model. Yes?

Thanks very much, David, for the day and for everything here. Betsy Graseck from Morgan Stanley. Just wanted to maybe dig in a little bit more to the wealth part of the Asset and Wealth strategy. I know many years ago, United Capital. Just trying to understand how much of what you laid out today is organic. And just layering on to that, what the path is for expanding your current footprint within Wealth? Is it to be entirely focused on the ultra-high net worth or how much into affluent -- mass affluent, are you interested in going from here?

Yes. So the plan that we've laid out today is organic. So it's an organic plan. We, obviously, have this ultra-high net worth franchise that's really extraordinary, and there is room to grow it. And so we will grow it. We've expanded into what you'd call high net worth and there's room to grow that also. I mean, Marc, do you want to make a couple of other comments?

I think you got it. I think the plan that I laid out is entirely organic, and I think it drives that grows, and we feel very good about it. As I mentioned, it's a very fragmented business. And so there's a lot of opportunity for us to grow, and we're going to continue to grow on the high end and kind of the ultra-high end and there's more growth we can do in the general sector.

Sorry, is there any color you can share just in terms of geography?

The opportunity -- and Marc made this comment, I mean, the opportunity we see significant opportunity both in the U.S., obviously, and the business in the U.S. is a really significant business, as you're well aware. But we also see opportunity internationally investing internationally also. Yes?

Devin Ryan with JMP Securities. So I think you said the top 100 clients are $6 billion in revenues, and there's been a lot of success with the One Goldman Sachs initiative. As you think about the next 50 to 100 clients. What does that look like? And really what I'm trying to think about is how deep it goes, because you're obviously going strategically from kind of probably the largest clients down the list. And so when do you start to hit kind of diminishing return and how deep is that? Is it the top 300, 400, 500 were going to be here in 3 years, 6 years where you've made a lot of incremental market share into those incremental groups.

So you're asking One GS as a model for big clients across the firm? Are you asking about the top 100 in global banking and markets going to the top 150?

Yes. Well, I'm asking about the top 100 going to 150, but in the context of covering them in kind of a more comprehensive way.

I'm going to use the life line again and go to Dan Dees.

So yes, so we built our franchise across thousands of clients, obviously, on the FICC and Equity side. The framework around the top 100 was really to focus on that enormous wallet and the opportunity to move share there. By going to the next 50, of course, it gets incremented, it goes from that $6 billion to a much smaller number of potential just mathematically because they're the next 50. By going from #3 to #1 or #2, that's across all 150. That's not just in the next incremental 50. So we still feel like we've got a lot of work to do on that overall 150. But yes, you get to smaller numbers over time. I think the key is similar to the way that David talked about and Kim talked about the ethos of One GS, not just being the One GS program but around the firm, this process we have set up this client centricity is focused on where we have gaps anywhere in the world, any product, any region, any sector, is something that bleeds beyond the top 100 or top 150 to our broader client base. And so we have opportunity to gain wallet share, not just in that 150, but beyond it. That's how I think about it.

David, in your comments and John's and Dan's comments, you talked about the increased durability of the FICC and Equity financing business. that business inherently is an episodic business. So can you talk to us about why you think that's a more durable revenue stream?

Well, it's -- when you talk about episodic, I think there are environments where there's a lot more competition and a lot more liquidity available to finance clients. And I'll remind everybody this is secured lending, collateralized lending to finance our clients. I think the scale of markets and the scale of clients that need constant financing for the positions I think that's a huge business. It can ebb and flow. It can certainly ebb and flow in terms of liquidity is available that supports it. We're actually at a very interesting moment where it's actually gotten more attractive for someone like us that's at scale to finance there. But I think that's a big business. Is there a little volatility and cyclicality to it? Yes, but it's not going away. And I think structurally, it's going to continue to grow as the assets that our clients control are going to increasingly need financing. And so I think given the scale of the world and the way there are fewer and fewer big global players that can provide those services, I actually think there's a nice tailwind for the leaders there, to, on their terms, appropriate terms with the right risk management to have very, very big growing businesses, financing the client base.

Dan Fannon, Jefferies. You talked a lot today all about organic growth. Can you talk about inorganic and maybe your acquisition appetite in this type of environment and maybe the segments where that inorganic might make more sense?

Yes. I've made a pretty consistent set of comments around this. We've done some things inorganically that have been relatively small. I think we made a very good acquisition last year in Asset Management and in Europe. At the moment, we're focused -- we've got some things to execute on here at the moment. I think we're very focused on the execution we have in front of us. I can't say that we wouldn't look at something strategically, particularly if it could accelerate our Wealth Management and our Asset Management platform broadly. But at the moment, the focus certainly in 2023 is on executing what's on our plate and making improvements in some of the areas we need to improve. Yes?

Thanks for taking this again. On the card partnership with Apple and GM, there's, obviously, been a lot of headlines around regulatory scrutiny of the business. Should we, from the outside, expect you to be adding more partnerships there over the course of the next year? Or is it going to be limited to those two? Like how do you measure success?

We have -- at the moment, success there, is driving these partnerships to profitability. We've been very clear that we have no plans to add more partnerships at this time. When we make progress and we can communicate to you exactly where we are on those businesses and those partnerships, we can then talk about it forward. But for the moment, the focus is we're focused on. And we've been clear we're not going to have more partnerships at the moment.

Denise from DWS. My question is around ESG. I would like to know, what role do you see it playing in your -- the growth ambitions of Goldman Sachs? And also a firm talks about being leaders everywhere you enter the share ambition for the spectrum of ESGs if you can comment on maybe products or services that you are looking forward to launch in -- within the submission of growth for 2023 onwards?

Sure. One of the things I'd point you to, I don't know if you've seen it or you looked at it, but if you go to our website, you can pull up our broad sustainability report, and you can look at how we focus broadly on sustainability. We use a broader definition than just the ESG metric mindset. We made a $750 billion finance -- advisory financing and investment commitment towards sustainable investment themes that we're focused on. We're working through that metric and our progress on that. We obviously have lots of clients that are very, very focused on their own transitions and how they evolve. We provide advisory service advisory services for them, raise capital for them. In our Asset Management business, we have a series of products that are ESG aligned. And so there are opportunities across the firm. And as that market cycle and capital allocation is directed towards certain sustainable activities, we'll participate in that. Yes?

So is it reasonable for investors to assume that if any strategic alternatives are pursued in the Consumer Finance business that are different from just running the business to breakeven by 2025, that they will become visible in the first part of 2023?

I just -- I know that everybody wants answers to things that I clearly -- I can't answer that question. We are focused on executing on what's in front of us, and we're looking at strategic -- all strategic options available to us. And I know that you want more clarity, but I would ask you to appreciate that I'm just not in a position to say anything more than what we said. I'll give you a follow-up.

I'm going to follow it up. I'm going to ask it a different way because one of the things that is so impressive about Goldman Sachs' true history is the risk management framework. You guys make a bad trade, you don't sit there and hope that it gets better, you get out of that position immediately. Some might say that consumer finance, in parts, has been a bad trade. Thus, I'm asking about the timing of -- if you do something different, I mean maybe the best strategy is running it to breakeven and better in the next couple of years. But I'm curious whether something could potentially be done near term versus mid-24, something like that?

I appreciate the compliment.

Follow-up from Brennan Hawken. And I won't ask about the...

Just use the mic.

Sorry if it wasn't picked up. I promise I won't to ask about the consumer. So when we think about your target...

You're welcome to. Everybody else does.

I will have my first movement on it. So I've already beaten that horse. When we think about through the target -- through the cycle targets, and we consider the experience in the last few years, you got -- you might argue that you guys are sort of there, right? You did better than the targets in '21. We were sub the targets in '22. And when the average actually showed it was sort of in line with the -- over the last few years, it was sort of in line with the range. So is the subtext of that message that you guys are there, not to say that you're satisfied and you won't keep pushing. But should we view the experience of recent years as an indication that you're already at the through-the-cycle targets? Or is that the wrong interpretation?

So a couple of things. First, just looking at the 3-year history, the average was 14.8%, we showed that. We also highlighted, I don't think what went on in 2020 with litigation is a normalized experience. And so the way I would look at it, the business performed in 2020 at a certain level, ex litigation, and performed at a really extraordinary level given the tailwinds in 2021. And then given what were enormous headwinds for business mix like ours, it performed at a different level in 2022. You can look at the average and assume what it is. I don't think this has been an average 3-year period. I do think what we tried to show you today is that our core businesses perform and have the capability to perform in the range of the targets. We have a drag from the platforms. We're focused on that. Denis talked about some expense initiatives, which gives us more flexibility. I think in one of Denis' slides, he showed a purposeful walk that kind of shows you from this year, which I don't think this was a normal year. I don't think 2022 is a normal year. I can certainly paint an environment where we could have a tougher year than 2022, but 2022 is not a normal year. In a normalized environment across the business, I think that our 95% of the businesses are positioned well to deliver on our targets with a little bit of work. We need to reduce the drag from platforms. We're focused on that. That's the way I think about it. Mike?

Can you comment more on the culture? I mean you highlighted One Goldman Sachs, the collaboration, the client service, the excellence, the integrity, but there have been a lot of news articles just -- maybe it's just a few people wining indirectly, maybe the articles got it wrong. I don't know from the outside, but comment on your view of the culture at Goldman Sachs. How has it evolved? How do you want it to evolve? And what is the partner turnover, if you have any metrics on that this year?

Sure. I'll make a couple of comments. And first, look, I'd just say, I hate the noise. I hate the noise. I live in the same neighborhood you all live in and I hate the noise, and I wish the noise was different. I think on the substance, we've accomplished a lot over the last few years. We've gotten a lot of things right. We got some things wrong. I don't think that's unusual for people that are running big complex businesses. I think inside the firm, we've got an extraordinary group of people that are working incredibly hard, and they performed well. I think the culture of Goldman Sachs is incredibly strong. If you were down and you were participating in our partner meeting a few weeks ago, and you watched the interaction and felt the excitement about how the firm has done, what the firm's been doing, you'd feel very, very good about it. Very, very good about it. But we also recognize that we've gone through a very unusual period over the last 3 years. I think the pandemic was a very tough thing on a culture like ours, the separation, the lack of coming together. This is such a human business. And so we've made conscious decisions to take some actions to reinvest and spend more time on investing in the culture. And one of the things that we're in the process of executing on, we're in the middle of it is what we're calling our Cultural Steward Initiative, where the leadership is spending time with small groups of 15 to 20 partners all over the world throughout the year, and we'll touch all the partners of the firm to continue to help the partners push the culture through the organization. So we take very active steps to invest in it. I read things in the paper. They don't match with what I know factually inside the firm. Here's a good one. I read over and over again about partners leaving the firm. 2022, there were less partner transitions at Goldman Sachs than any year at Goldman Sachs going back to 2014. At the moment, year-to-date, our turnover is at a 5-year low, not just for partners, in the whole firm. Now I keep reading in the paper all sorts of things about our turnover and our headcount and our partners, et cetera. I think also, Mike, you do know that we run an organization where we try to keep the partnership at a certain size, Yes, as the firm grows, it can grow a little bit, but we try to keep it a certain size. It's just math that every 2 years, we make a certain number of partners, let's say, over the last few cycles, we've made 60 to 80. That would mean if you're keeping the partnership at the same size, 60 to 80 partners transition every 2 years. Now maybe you have a little bit of growth, so it's a little bit less. There's been nothing inconsistent with that during our tenure at our tenure at the firm. And so that's the way we run the firm. People work here. They spend 25 years. They have a great career. They go off and they do other things. They become great clients. That's part of the virtuous ecosystem of Goldman Sachs. And so we're going to continue to invest in our culture. I think it's very good. I do think we had dramatic shifts between really extraordinary 2021 and a tougher '22, that probably created more noise or a little bit more rumbling than usual. But I feel good about the partnership, good about the culture. That doesn't mean that we don't have to keep investing and working on it, we will. But that's our job, and I know we'll execute on it.

To that last point. So you say medium-term targets, you gave a glide path for 11% ROTE up to 15% and 150 basis points from -- well, 150 basis points from platform and about 100 from efficiency, that will get you to 15%. And winning does cure all, if you can get back to those nice returns, what time frame do you think you can get there? Because [indiscernible]...

Mike, I'm not going to predict timeframes. We said through the cycle. And I just want to highlight the buildup that Denis used was meant to be an example. It starts off at 10.2% in what was an extraordinarily difficult environment, okay? If we think that 2022, I can absolutely paint worse environments, but if we think 2022 is a normalized environment, 2022 wasn't a normalized environment. By the way, neither it was 2021, okay? So take a normalized environment through the cycle. We've tried to lay out to you in a really transparent way what these businesses look like and how they perform and through the cycle, we'll deliver on those returns. We're very committed to it and very focused on it. We'll make the right adjustments in the firm. We'll be nimble and flexible as we've always been to do that.

Yes. Chris Kotowski again. Questions probably for Dan Dees. One, if you look at over the last 10, 12 years, the European banks have been share givers and all the American banks have kind of gained share. And I'm just kind of curious if you're trying to increase your share of wallet, where does the share come from the next couple of years?

Dan, do you want to comment?

Sure. We're equal opportunity share takers we'll take it from everybody. There's no preconceived biases. Now look, you're right. The European banks have given share. I think there is opportunity. Again, as we execute on our businesses, the strong get stronger, the more deals you do, the more experience you have, the more recent you are in your experience, the better. And so our strength can continue. Some of that weakness could continue. And we're finding opportunity to gain share against all the banks. I do think it's an environment where the stronger getting stronger, as I said. And so the kind of the top 3 banks are consolidating their share in all of our businesses, including investment banking, but there's no particular group that I think is most vulnerable, so to speak, is just us leaning into our strength to take share broadly from the market.

Behind Chris -- I'm sorry, Chris, you had a follow-up.

Well, the second question was just your perspective on whether the current level of trading activity that we've seen in the last couple of quarters, is -- have we settled into a new normal or are we still going to normalize back to where we were pre pandemic? Or what's your view on that?

Well, look, I think as I said -- sorry. As I said in the presentation, as it relates to settling back to prepandemic and to address another question that was asked over here, I do think versus the pre-pandemic levels, we fundamentally raised the floor in our business in a couple of ways. We added wallet share, and we continue -- and we anticipate continuing to add wallet share. And we added incremental financing revenues, both of which just raised the overall level of our business versus those pre-pandemic levels. We're still quite optimistic on the outlook, the trading outlook and the banking outlook. We have a complex investing environment with just structurally higher rates right now and diverging central bank actions, all of which leads to a lot of activity in our business. So we remain quite constructive on what we're seeing in the overall business environment.

Yes. I would just add to that, that -- if you go back and you look at the intermediation trading businesses from '17 to '19, I do think -- I can't tell you that what you saw in 2021 and 2022 is going to be the new normal. But I think whatever the new normal is, it's more than it was in '17, '18, '19. There's been structural growth in the market and structural growth in the opportunity set.

Just one thing to add to that is we are in a particularly anemic capital markets environment. And that tends to have a lot of flow through to the intermediation and financial point we don't exactly know how to predict where the wallet is going, but I would just observe the last few quarters have been very, very sluggish on the capital market side. If you had more normalized volumes, you don't need 2 buyers, put more normalized volumes, you get better outcomes on the market side as well.

Behind Chris.

Charles Peabody Portales Partners. I'm interested in getting some color -- more color on the efficiency goal of 60%, specifically the trajectory or the path of getting there. Is that a 3-year goal in 3 years? Or is it something you could think you can get there more quickly? And I recognize revenues as part of that ratio or that equation, and you emphasized that you're in cyclical businesses. but you've also emphasized the durability of those revenues. So is it something we could expect progress on this year? And given that $1 billion of cost saves that you've highlighted?

I think you're going to expect some progress this year based on the overall environment. But I mean, Denis, do you want to comment a little bit more?

I mean, it's one of our firm-wide targets. I think as you point out, progress towards the efficiency ratio is driven in part by revenues and in part by more efficiently operating the firm on a go-forward basis. I think one of the things that came out in Marc's presentation with respect to the go-forward asset and wealth management strategy is the notion of having a lot of the people and resourcing in place as we continue to scale incremental management fees. There's a number of places in the firm where we've been investing over the last couple of years in platforms and people where we can drive marginal revenues with more efficiency. We have not put out a specific date for when the 60% target would be achieved.

Devin Ryan, again. Around earnings, it felt like the tone from clients was still pretty cautious in Investment Banking. Recent interview with you, I think, I felt like maybe there was a little bit of falling that you were seeing. And then I know we're still in this anemic capital markets. But can you maybe just give an update on kind of where you feel like we are in the market right now? Or are clients maybe starting to feel a little bit more constructive to move forward? Or is uncertainty still just too great to move the needle?

I think the -- I think CEO confidence has a lot to do with activity in capital markets. I also think we've gone through a very, very significant adjustment. So if we were standing here a year ago, we won a week after the start of the award. But if we were standing here in the first 1.5 months of the year, we're coming off of this extraordinary capital markets environment that's one of the best capital markets environments I've seen in my nearly 40 years of doing this. We've materially tightened economic conditions, and we've gone through a big, big repricing and transition in markets. And normally, when you see that, you get a 4- to 6-quarter lag before people kind of reset their expectations on cost of capital if you're doing debt financing on valuation if you need to raise equity, et cetera. And so it's not surprising to me that we're still in relatively sluggish capital markets because we're kind of 4 quarters in, what normally would say was a 4- to 6-quarter kind of rebalancing or transition period. I think the overall environment from a confidence perspective has gotten a little bit better. If you look at last summer, and if you were talking to CEOs broadly, I think the consensus of the CEO community was we run for a very, very rough ride and the chance of kind of getting through the cycle without a real recession in the United States, was probably very low. I think over the course of the last 6 months, businesses have performed better than people have expected. The consumer has been more resilient. Service businesses have really been booming. And the labor market is still relatively tight. We're 3.4% unemployment. And so that's left people feeling like the chance of a soft landing that we could muddle through in '23 into '24 without a recession. I think there's more of a view. And so that's improving confidence. That doesn't mean it will play out the way that it's improving confidence. I think what's still hampering confidence, particularly in the CEO community. If there's a real belief that as they look at their businesses, that inflation is going to be stickier and harder to moderate than the market's now predicting. And so when I talk to CEOs they feel more uncertainty about the course of inflation as we run through 2023 into 2024, and it's going to be harder to moderate, and therefore, might, ultimately, take tougher monetary action to move it. And so I do think you're going to see -- I think we're seeing a little bit of improvement in capital markets activity. I do think you'll see some improvement in capital markets activity, particularly in the back half of the year. But part of what will affect that is just how this economic scenario, which I would still gauge as uncertain plays out. Yes?

Scott Cavanagh with APG. Given the emphasis in the prior Investor Day on cost reduction through the growth of deposits, can you just flesh out what -- do you have an internal target of where you want them to be and given the dearth of issuance this year, could you just give us a heads up on where you think it's going to be for the firm?

Do you want to talk about deposits and issuance some...

Sure. So we do have -- we have internal plans with respect to deposit growth, asset growth across the firm, across the entities. We expect to continue to drive increased levels of deposit activity and continue to build out activities in our various bank entities around the world. Our issuance from a benchmark perspective, I think you're referencing was down substantially last year on a year-over-year basis. and we expect it to be down substantially in turn this year. So we don't expect to have an extremely large funding footprint in the benchmark markets.

One follow-up. Would that be -- would that -- would just be maturities plus TLAC efficient callables, is that how we should be thinking about it?

We are thinking both about new issuance activities and what our call activity will be. given some of the activity away from us in the market, we're being very thoughtful about what our particular choices are, both with individual issuances as well as our overall relationships with investors.

Betsy?

Just to follow up to my last question on Asset and Wealth Management. Recently, obviously, you restructured how you present yourself to the street, putting those two together. I just want to get a little bit more color an expectation from you on why you put those two together and how you think the growth trajectory will look having done that going forward versus potentially having had them separated before?

So they've been together historically at Goldman Sachs. The organization of the firm today, let's just put platform aside with the organization of banking and markets and asset and wealth. Three, 4 years ago, when we set out, we kind of had a vision for where we wanted to take the firm, this was always the way we envisioned organizing these core parts of the business of the firm. But as I explained and I talked about, it's been a journey to reorganize the firm and put the pieces together I think one of the things that we're in a position to do, and I think you've seen some of it today, we want to give you more transparency around some of the components of that business and how we build that business. And we've given you more today and we continue, we take feedback from people like you and others all the time about what you need to see to understand the trajectory of that business, ultra-private net wealth business. We have $1 trillion of assets, as Marc highlighted, from the Wealth business as a part of our Asset Management umbrella. I think we have opportunity to grow the wealth channel, as we talked about a few minutes ago, and we're focused on that. But also you have to think about the fact that while we've had an institutional GSAM business. We've never really raised money for a broad alternatives platform from institutions. I mean we did on a limited basis, but that's a new muscle group for Goldman Sachs for us to go out and raise institutional money across our whole platform. We now think as one of the largest active asset managers of the world with a really broad global platform that really has scale in almost every asset both in public and a big private alternatives platform. What we're finding from big institutions around the world is that's exactly who they want to partner with, and they're very open to that. So that's a new part of Goldman Sachs, something we're working on, and we're continuing to make progress on. We're at time? One more?

I guess a question for Denis. Just around the provisioning outlook for GreenSky. You mentioned the macro scenario, how that would impact you, but when we think about just the origination activity, it's a new business for us. Just remind us how you think about incremental provisioning tied to new origination for GreenSky?

Sure. So I think one of the important credit underpinnings of the merchant point-of-sale business is actually the profile of the end consumers that are customers of the merchants. Stephanie highlighted their FICO score at 770. The fact that they are homeowners, they're generally making investments in their homes with the financing that's provided. So we think they're generally higher quality credit risks and historical loss experience for that group of end consumers is a lot lower than a generic set of consumers given their FICO characteristics. So ultimately, that business has just started to come on to our balance sheet. We're observing the performance of those customers. We are baking in both what we can observe in terms of the activity and payment of those end customers as well as the general macroeconomic outlook they're not independent of that outlook, notwithstanding the relatively stronger credit position. So it is a higher quality group of borrowers than perhaps other components of the Consumer Platforms business.

So I just -- before I invite you all to join us for lunch, I do want to thank you for coming. I do want to thank you for spending time with us. I do want to thank you for your interest. We are working very, very hard to execute on our strategy. We'll continue to share more with you as we can, and we welcome your feedback. And so if you have feedback for us, please reach out. We'd be delighted to hear it. We're going to continue to stay focused on operating Goldman Sachs for our shareholders. And I hope you've enjoyed the day. I hope you enjoyed the launches. Have a great day. Thank you.