Goldman Sachs Group, Inc. (the) · NYSE:GS
Goldman Sachs Group, Inc. (the) — Debt Investor Presentation (December 2020)
23 slides from Goldman Sachs Group, Inc. (the)'s debt investor presentation, Dec 3, 2020
Slide 1: Fixed Income Investor Presentation
Fixed Income Investor Presentation Brian J. Lee, Chief Risk Officer Beth Hammack, Global Treasurer December 3, 2020
Slide 2: Strong Financial Position
Strong Financial Position 3Q20 Net Revenues ($bn) ROE Gross Leverage 12.2x $32.8 $26.6 +5.5pp +0.2pp Average GCLA $302bn (% of Average Total Assets) (26%) 10.4% 7.6% 2019YTD 2020YTD 2019YTD 2020YTD Standardized CET1 Capital 14.5% Excluding litigation 1
Slide 3: Track Record of Earnings Stability
Track Record of Earnings Stability Greater earnings stability vs. peers, benefitting from dynamic and disciplined expense management Revenue Volatility1 Earnings Volatility1 71% 43% 35% 34% 11% 8% 7% 6% 2010-2014 2015-2019 2010-2014 2015-2019 GS US Peer Average GS US Peer Average 2
Slide 4: Clear Strategic Direction
Clear Strategic Direction Grow and Strengthen Diversify Our Products Operate More Existing Businesses and Services Efficiently Driving Credit Positives Improved capital More stable, durable Increased Enhanced franchise efficiency and enhanced revenues and earnings diversification strength funding pr
Slide 5: Strong Risk Management Oversight
Strong Risk Management Oversight Culture of Risk Management Disciplined risk-reward approach Deep bench of risk managers Culture of Risk Process and Consensus-driven decision making Management Structural Oversight Process and Structural Oversight Independent controls and governance Comprehensive str
Slide 6: Dynamically Navigating Across Risk Dimensions
Dynamically Navigating Across Risk Dimensions Key Measures Taken Current Areas of Focus Operational Seamlessly transitioned to 98% Returning our people to the office safely Resilience working remotely in accordance with local guidelines Liquidity Prefunded for stress outflows; Maintaining strong liq
Slide 7: Credit Risk: Overview of Loan Portfolio
Credit Risk: Overview of Loan Portfolio Loans Breakdown ($bn)1 Key Credit Metrics2 3Q20 Loans at Amortized Cost $99.2 3.7% Loans at Fair Value $13.9 ALLL to Total Loans Held for Sale $2.5 Gross Loans Total Gross Loans $115.6 Allowance for Loan Losses $3.7 Total Loans $111.8 2.8% 16.1% ALLL to Gross
Slide 8: Review of Select Loan Exposure
Review of Select Loan Exposure Select Sector Credit Exposures CRE Exposure3 Retail 3% Funded Commitments1 Office 6% Industrial Exposure % of % Exposure % of 6% Sector Warehouse ($bn) Total2 Secured ($bn) Total2 Residential Facilities Property 32% Corporate $52 100% 76% $120 100% 7% Lodging Oil and G
Slide 9: Asset Management Balance Sheet
Asset Management Balance Sheet Equity Portfolio Debt Portfolio Private Equity Loans Amortized Corporate $16bn By Vintage % at Cost Secured/Unsecured3 % 67% 42% 2017-Present 33% Secured 88% 2014-2016 35% Unsecured 12% Public Equity Loans at $19bn Public 2013 or Earlier 32% FV Equity $3bn 13%2 $31bn T
Slide 10: Interest Rate Risk
Interest Rate Risk Net Interest Income ($bn) Rate Sensitivity $4.4 $3.8 $3.3 $2.9 Interest Rate Risk Management We centrally monitor and manage interest rate risk across the organization 2017 2018 2019 2020YTD As % of Interest Rate Sensitivity Total Net 9% 10% 12% 10% Revenues Our balance sheet
Slide 11: Balance Sheet
Balance Sheet Balance Sheet Mix ($bn) Sources of Funding $1,132 3% $993 7% Secured Shareholders' Other Assets Funding Equity 4% 10% 12% Investments 6% 19%2 Loans 11% ~90% Of balance 36% Unsecured Trading Assets 36% sheet comprised of ~$760bn Long-Term As of 3Q20 Debt liquid assets1 28% Customer & Ot
Slide 12: Funding Strategy
Funding Strategy Increasing high-quality deposits to improve funding diversification and drive lower interest expense Key Tenets of our Strategy Target State 300 Legend 250 Current State 1 Further diversify funding mix via deposits Future State 200 1 Funding Costs 150 2 Enhance Asset-Liability Manag
Slide 13: Deposit Growth
Deposit Growth Strong Deposit Inflows Ongoing Unsecured Funding Mix Shift $261bn 3Q20 Consumer Deposits $96bn Deposits $190bn 50% Achieved our +$36bn medium-term target of at least $60bn 50% deposits Wholesale Private Bank $66bn Deposits Unsecured +$10bn 50% $56bn Transaction +$25bn $28bn Banking $3
Slide 14: Unsecured Benchmark Funding
Unsecured Benchmark Funding Diversified across Tenor, Currency, Channel and Structure 2020 Benchmark Issuance by Currency through 3Q20 During the first nine months of 2020 we raised $14.2bn of benchmark debt and preferred stock EUR 42% No benchmark or preferred stock issuance in 2Q20 or 3Q20 Di
Slide 15: Unsecured Non-Benchmark Funding
Unsecured Non-Benchmark Funding Non-Benchmark Debt Outstanding as of 3Q20 As part of our broader non-deposit unsecured funding strategy, we Other strive for a diversified funding mix across various products, channels, EUR 8% issuing entities, currencies, tenors and investor types 15% Currency In add
Slide 16: Liquidity Risk Management
Liquidity Risk Management Average Liquidity Coverage Ratio Trend Solid Liquidity Positioning 144% 134% 131% 127% 126% 130% 123% Well in excess of LCR requirements 121% 120% 118% Eligible HQLA composed almost entirely of Level 1 assets Highly liquid balance sheet with average GCLA of $302bn for
Slide 17: Prudently Managing Capital – Standardized CET1 Ratio
Prudently Managing Capital – Standardized CET1 Ratio Excess Capital Levels Robust Capital Accretion +200bps Capital Build in 2 Quarters 14.5% B/S Extension Organic Capital 13-13.5% Accretion 14.5% Current to Clients Req. 13.6% 13.3% 13.3% 12.5% G-SIB 3.0% Minimum 4.5% 3Q20 Target 4Q19 1Q20 2Q20 3Q20
Slide 18: LIBOR Transition
LIBOR Transition We are committed to ensuring a seamless transition for our clients, the marketplace and our firm Leadership Accountability Outstanding Benchmark Debt and Preferred Stock Referencing USD LIBORs ($bn) Chief LIBOR transition officer and dedicated, global transition team since 2018 to d
Slide 19: Key Takeaways
Key Takeaways Well positioned to Managing liquidity and Commitment to delivering Continued focus on risk navigate uncertain capital to ensure ongoing One Goldman Sachs management consistent backdrop with strong financial strength and and executing on our with historical track balance sheet, robust o
Slide 20: Fixed Income Investor Presentation
Fixed Income Investor Presentation Brian J. Lee, Chief Risk Officer Beth Hammack, Global Treasurer December 3, 2020
Slide 21: End Notes
End Notes Note: All data as of 3Q20, unless otherwise indicated These notes refer to the financial metrics and/or defined term presented on: Slide 1: Note: YTD refers to amounts through 3Q for each year represented. Slide 2: 1. Annual revenue volatility calculated by dividing standard deviation of r
Slide 22: End Notes
End Notes Slide 12: 1. Excludes affiliate assets. Slide 13: 1. Scheduled benchmark maturity values for 2020, 2021 and 2022 as of September 30, 2020; 2020 maturities include the redemption of all outstanding Series L preferred stock and the redemption of certain senior benchmark notes through Septemb
Slide 23: Cautionary Note on Forward-Looking Statements
Cautionary Note on Forward-Looking Statements Statements about the firm’s target metrics, including its target ROE, ROTE, efficiency ratio and CET1 capital ratios, and how they can be achieved (including resumption of share repurchases), and statements about future operating expense (including futur
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