Goldman Sachs Group Inc (NYSE:GS) Q3 2019 Earnings Conference Call - Final Transcript

Oct 15, 2019 • 11:00 am ET

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Goldman Sachs Group Inc (NYSE:GS) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning. My name is Dennis, and I will be your conference facilitator today. I would like to welcome everyone to the Goldman Sachs Third Quarter 2019 Earnings Conference Call. [Operator Instructions] Thank you. Ms. Miner, you may begin your conference.

Executive
Heather Kennedy Miner

Good morning. This is Heather Kennedy Miner, Head of Investor Relations at Goldman Sachs. Welcome to our third quarter earnings conference call. Today, we will reference our earnings presentation, which can be found on the Investor Relations page of our website at www.gs.com.

No information on forward-looking statements and non-GAAP measures appear on the earnings release and presentation. This audiocast is copyrighted material of The Goldman Sachs Group Inc. and may not be duplicated, reproduced or rebroadcast without our consent.

Today, I'm joined by our Chairman and Chief Executive Officer, David Solomon; and our Chief Financial Officer, Stephen Scherr. David will start with a high level review of our financial performance and the operating environment. He will then provide a brief update on several strategic items including key investments we are making to drive future growth, the significance of the Apple Card launch, specifically as it relates to other technology innovation at the firm and recent personnel changes to align with our longer-term strategic priorities. Stephen will then cover third quarter results across each of our businesses. They'll be happy to take your questions after that.

I'll now pass the call over to David. David?

Executive
David M. Solomon

Thanks, Heather, and thanks to everyone for joining us this morning. I'm happy to be here with you. Let me begin on Page 1. We reported third quarter 2019 revenues of $8.3 billion, down 6% versus last year. Net earnings were $1.9 billion resulting in an earnings per share of $4.79. Year-to-date, we produced an ROE of 10.4% and an ROTE of 11%. Our business performed well against an uncertain geopolitical backdrop characterized by increased volatility and shifting client sentiment.

A few highlights worth mentioning: In Investment Banking, despite lower results versus a strong third quarter in 2018, we continue to have the world's leading franchise, ranking number one in global announced and completed M&A and number one in equity underwriting year-to-date. In ICS, we generated year-over-year growth, demonstrating the breadth of our client footprint including progress across both fixed income and equities. We produced record net interest income in debt investing and lending, which annualizes to $3.6 billion. In Investment Management, our assets under supervision increased by over $100 billion to another record of $1.8 trillion, and we generated record quarterly management and other fees. Lastly, we successfully launched a new and innovative credit card with Apple.

Turning to Page 2, the operating environment in the third quarter remain mixed and slowed the pace of activity by many of our corporate clients. During the quarter, trade war concerns contributed to a risk-off sentiment and sharply lower global interest rates, particularly in August. Markets were also impacted by turmoil in Argentina, Brexit headlines in Europe, and a temporary spike in oil prices in September. Throughout