The Goldman Sachs Group (GS) Q4 2023 earnings summary

Executive summary

• FY2023 net revenue was $46.254bn, down 2% YoY; net earnings were $8.52bn and diluted EPS was $22.87. Revenue was the third-highest annual total.

• 4Q23 net revenue was $11.318bn, up 7% YoY and down 4% QoQ; net earnings were $2.01bn and diluted EPS was $5.48.

• More than 70% of 2023 revenue came from baseline and more durable sources; durable revenues grew over 60% since 2019.

• Management cited a simplified strategy and stronger platform, with priorities including durable growth, client service, scale, efficiency and risk management.

Financial highlights

• FY2023 operating expenses rose 11% to $34.487bn; pre-tax earnings were $10.74bn and provision for credit losses was $1.028bn, versus $2.72bn in 2022.

• 4Q23 expenses were $8.487bn, including a $529m FDIC assessment; provision for credit losses was $577m, versus $972m in 4Q22 and $7m in 3Q23.

• Selected items and the FDIC assessment reduced FY2023 pre-tax earnings by $3.388bn, net earnings by $2.781bn and EPS by $8.04; 4Q23 EPS impact was $0.83.

• FY2023 record results included $9.486bn in management and other fees, $2.81tn of assets under supervision, record Equities financing and record private banking and lending revenue.

Outlook and guidance

• Medium-term AWM targets include mid-20s margins and mid-teens returns; medium term is defined as 3–5 years from year-end 2022.

• 2024 priorities include growing durable revenue, enhancing client experience, improving scale and efficiency, optimizing resources and strengthening risk management.

• Historical principal investments are targeted below $45bn in 2024 and below $35bn over the medium term, with reductions planned over time.

• Investment banking backlog was higher at 4Q23-end than at 3Q23-end; transaction timing, completion and revenue realization remain uncertain.