Introduction

The Goldman Sachs Group, Inc. (Group Inc. or parent company), a Delaware corporation, together with its consolidated subsidiaries, is a leading global financial institution that delivers a broad range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the company is headquartered in New York and maintains offices in all major financial centers around the world.

Executive Overview

For the third quarter of 2024, Goldman Sachs generated net earnings of $2.99 billion, compared with $2.06 billion for the third quarter of 2023. Diluted earnings per common share (EPS) was $8.40, compared with $5.47 in the prior year period. Annualized return on average common shareholders’ equity (ROE) was 10.4%, compared with 7.1% in the prior year period. Book value per common share was $332.96 as of September 2024, 1.8% higher compared with June 2024 and 6.2% higher compared with December 2023.

Net revenues were $12.70 billion for the third quarter of 2024, 7% higher than the third quarter of 2023, reflecting higher net revenues in Global Banking & Markets and Asset & Wealth Management, partially offset by lower net revenues in Platform Solutions. Provision for credit losses was $397 million, compared with $7 million in the prior year period. Operating expenses were $8.32 billion, 8% lower than the third quarter of 2023.

For the first nine months of 2024, Goldman Sachs generated net earnings of $10.17 billion, compared with $6.51 billion for the first nine months of 2023. Diluted EPS was $28.64, compared with $17.39 in the prior year period. Annualized ROE was 12.0%, compared with 7.6% in the prior year period.

Net revenues were $39.64 billion for the first nine months of 2024, 13% higher than the first nine months of 2023, reflecting higher net revenues in Global Banking & Markets and Asset & Wealth Management. Provision for credit losses was $997 million, compared with $451 million in the prior year period. Operating expenses were $25.51 billion, 2% lower than the first nine months of 2023.

Business Environment

During the third quarter of 2024, the operating environment was generally characterized by continued broad macroeconomic concerns, including concerns and uncertainty about inflation, ongoing geopolitical tensions, central bank policy and the potential outcomes of national elections. Despite these concerns, the economy in the U.S. has remained resilient.

Critical Accounting Policies

The firm’s most critical accounting policy is the use of fair value to measure financial instruments, with related gains or losses generally recognized in the consolidated statements of earnings. The firm has an independent price verification process and controls over the valuation of financial instruments to ensure they are properly valued.

The firm also records an allowance for credit losses on loans and lending commitments held for investment and accounted for at amortized cost. The allowance takes into account forecasts of future economic conditions over the expected life of the loans and lending commitments.

The use of estimates is also important in determining discretionary compensation accruals, accounting for goodwill and intangible assets, provisions for litigation and regulatory proceedings, and accounting for income taxes.

Segment Results

Global Banking & Markets generated net revenues of $8.55 billion for the third quarter of 2024, 7% higher than the prior year period, reflecting significantly higher investment banking fees and higher equities net revenues, partially offset by lower FICC net revenues. Provision for credit losses was $54 million, and operating expenses were $4.97 billion.

Asset & Wealth Management generated net revenues of $3.75 billion for the third quarter of 2024, 16% higher than the prior year period, primarily reflecting net gains in equity investments and higher management and other fees. Provision for credit losses was a net benefit of $109 million, and operating expenses were $2.85 billion.

Platform Solutions generated net revenues of $391 million for the third quarter of 2024, 32% lower than the prior year period, primarily reflecting significantly lower net revenues in the consumer platforms business. Provision for credit losses was $452 million, and operating expenses were $498 million.

Balance Sheet and Funding

As of September 2024, total assets were $1.73 trillion, an increase of $86.49 billion from December 2023, primarily reflecting increases in trading assets, investments and customer and other receivables. Total liabilities were $1.61 trillion, an increase of $82.19 billion from December 2023, primarily reflecting increases in collateralized financings, customer and other payables, deposits and trading liabilities.

The firm’s leverage ratio was 14.3x as of September 2024, compared with 14.0x as of December 2023. Tangible book value per common share was $311.88 as of September 2024, 6.6% higher compared with December 2023.

Outlook

Looking ahead, if uncertainty and concerns about geopolitical tensions, central bank policy, inflation and the commercial real estate sector remain elevated, it may lead to a decline in asset prices, a decline in market-making activity levels, or a continued decline in investment banking activity levels, which would likely negatively impact the firm’s net revenues and provision for credit losses.

The firm remains focused on growing its third-party alternatives business and expanding its credit alternative assets. It also aims to achieve pre-tax profitability in its Platform Solutions segment by the end of 2025.