November 5, 2018 Goldman Sachs Presentation to Bank of America Merrill Lynch Future of Financials Conference Stephen M. Scherr Chief Financial Officer
Cautionary Note on Forward-Looking Statements Today’s presentation includes forward -looking statements. These statements are not historical facts, but instead represent only the Firm’s beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside of the Firm’s control. Forward -looking statements include statements about potential revenue and growth opportunities. It is possible that the Firm’s actual results, including the incremental revenues, if any, from such opportunities, and financial condition, may differ, possibly materially, from the anticipated results, financial condition and incremental revenues indicated in these forward-looking statements For a discussion of some of the risks and important factors that could affect the Firm’s future results and financial condition, see “Risk Factors” in our Annual Report on Form 10 -K for the year ended December 31, 2017. You should also read the forward-looking disclaimers in our Form 10-Q for the period ended September 30, 2018, particularly as it relates to capital ratios, the Tax Cuts and Jobs Act and information on the calculation of non-GAAP financial measures that is posted on the Investor Relations portion of our website: www.gs.com. Statements about our revenue and growth opportunities are subject to the risk that the Firm’s businesses may be unable to generate additional incremental revenues or take advantage of growth opportunities Statements on the year-to-date (YTD) are as of September 30, unless otherwise noted The statements in the presentation are current only as of its date, November 5, 2018 2
Leadership Action Plan Our Commitment Current Work Streams Business Objectives Conducting comprehensive front-to-back Drive more durable franchise reviews of our businesses 1 revenues across the firm Evaluating business adjacencies, with focus on growth Generate above-average earnings 2 Working to increase transparency and growth vs. the industry accountability, including new disclosure and financial targets Planning to provide an update on our strategy Optimize investment spend and 3 in Spring 2019 capital allocation We are committed to producing best-in-class total shareholder returns 3
Client Centric Strategy Driving innovation and growth to serve client needs Address client needs Provide differentiated service Deliver one firm Institutions Corporations and Governments Individuals Services Services Opportunities Services Opportunities Opportunities ✓ Attractive savings options Cash management ✓ Differentiated ideas Automation and Digital wealth ✓ Strategic advice electronic execution management ✓ Transparent and flexible Employee financial ✓ 24/7 access to global lending solutions health markets and liquidity Personal financial ✓ Access to capital Increased financing ✓ Tailored wealth management tools Corporate liquidity ✓ Seamless “ best ” management management execution ✓ Addressing customer pain Additional financial ✓ Hedging and risk points; one-stop shop for products Commercial lending ✓ Bespoke solutions management financial well-being We seek to expand the firm’s addressable market 4
2018YTD in Review Firm Performance Net Revenues ($bn) Diluted EPS ROE and ROTE 14.6% $28.1 $19.21 $24.2 13.7% $14.11 10.9% 10.3% 2017YTD 2018YTD 2017YTD 2018YTD 2017YTD 2018YTD Highest YTD Net Revenues Highest annualized 9MYTD Record YTD Diluted EPS in 8 Years returns in 9 Years Strong YTD performance across our diversified client franchise shows the embedded operating leverage of the franchise 5
Announced Growth Initiatives Monitoring Our Progress Key Performance Indicators 2018YTD Revenue Progress >40 ~80% Expand ~$40bn committed senior hires 1 Investment of targeted Client ~$0.2bn deal volume from >3,000 YTD Banking clients with assigned Coverage new clients meetings with new clients coverage FICC +180bps ~$0.3bn Institutional +45bps +~19% Initiatives 2 Equities global Client FICC institutional increase in Equities low-touch Equities Services wallet share 3,4 financing balances 3,5 ~$0.4bn market share 3 Initiatives GSAM, PWM ~$0.4bn Net increase ~$24bn >$60bn and Ayco Investment of >70 PWM and GS Select loans organic LTFB net Management PWM Lending PWM advisors 3 (+$3bn since YE16) ~$0.2bn inflows 3 and GS Select ~$27bn Marcus Deposits ~$9bn ~$0.2bn and Loans >2mm Investing & Marcus deposits and net balance sheet ~$4bn Lending Marcus customers deployed for institutional Inst’l. Lending ~$0.8bn lending & financing 3 Marcus loans & Financing Firmwide ~$2.5bn YTD, we have achieved ~50% of our 2020 opportunity 6 1 2018YTD 2 FICC Initiatives include a portion of net revenues recorded in Investment Banking and I&L segments 3 Since 2016YE 4 Per Coalition, includes top 1,300 institutional clients in the FICC wallet, excludes corporates, as of 1H18 5 Includes physical and synthetic balances
Investment Banking State of the Franchise YoY Net Revenue Growth ($bn) Strategic Objectives Maintain #1 global Investment Banking franchise, leveraging corporate relationships to deliver the full capabilities of the firm $5.8 $5.2 — Expand our product offering, including cash management and Ayco $2.2 $2.0 Grow our client footprint, deepening penetration with existing corporate $1.3 $0.8 clients and financial sponsors; grow regions with lower share $2.4 $2.3 Protect share gains in Debt Underwriting, including acquisition finance 2017YTD 2018YTD Harness technology to better serve our clients Financial Advisory Equity Underwriting Debt Underwriting GS Announced M&A Market Share by Deal Size YTD League Tables 1,2 (Average 2008-2018YTD 1 ) 66% Announced M&A #1 44% 40% Equity & Equity-Related #1 26% IPOs #1 High-Yield Debt #2 $20bn+ $10bn-$20bn $5bn-$10bn $1bn-$5bn Investment-Grade Debt ($+ € ) #4 7 1 Source: Dealogic 2 All rankings as of 2018YTD
ICS: FICC State of the Franchise YoY Net Revenue Growth ($bn) Strategic Objectives Expand wallet share with asset managers, banks, and insurance $5.1 companies; broaden corporate coverage $4.3 Optimize capital deployment and expense efficiency Understand, analyze, and transform risk for our clients Deliver platforms for content, execution, and analytics 2017YTD 2018YTD Market Making Financing Synergistic to GS Strong Client Franchise: Client Mix Other #2 13% Asset Managers Institutional Investment Investing 30% Corporates Wallet Share 2 Banking & Lending 15% 2018YTD 1 +45bps FICC Institutional Client Banks / Brokers Hedge Funds 20% Wallet Share 2,3 22% 8 1 Based on gross sales credits. “Other” includes pension funds, insurance companies, and governments 2 Per Coalition, includes top 1,300 institutional clients in the FICC wallet, excludes corporates, as of 1H18 3 Compared to 2016YE
ICS: Equities State of the Franchise YoY Net Revenue Growth ($bn) Strategic Objectives Consolidate market share post MiFID II $6.0 $5.2 $1.3 Deliver integrated execution and financing solutions to systematic $1.2 and traditional clients $2.3 $2.2 Expand and diversify our client base through innovative structured products $2.4 $1.8 Leverage corporate relationships and derivative franchise strength 2017YTD 2018YTD to drive incremental business Equities Client Execution Commissions and Fees Securities Services Strong Client Franchise: Client Mix Client Financing Balances 1 Structured Products Net Revenues 2 Corporates #3 Asset and Other Managers 17% Institutional 34% Wallet Share 4,5 2018YTD 3 +31% Banks / Brokers Low-Touch & 14% FY2016 3Q18 Trailing Hedge Funds YE2016 3Q18 Quant Balances 6 12 Months 35% 9 1 Includes physical and synthetic balances 2 Structured Products are primarily comprised of certain equity derivative products 3 Based on gross sales credits, excludes Securities Services. “ Corporates and Other” includes corporates, pension funds, insurance companies, and governments. “ Banks / Brokers” primarily comprised of Third-Party Distributors. 4 Per Coalition, excludes corporates 5 As of 1H18 6 2018YTD vs. 2016YE
Investment Management State of the Franchise YoY Net Revenue Growth ($bn) Strategic Objectives Increase coverage of ultra-high-net-worth clients (including family $5.3 offices) and expand across regions $0.6 $4.6 $0.5 $0.7 Expand Ayco corporate financial counseling by adding new clients $0.3 Continue to expand Advisory, particularly OCIO and insurance $4.1 $3.8 Drive growth via our diversified products across alternatives, classic GSAM, Environmental, Social, and Governance, and ActiveBeta 2017YTD 2018YTD Leverage engineering capabilities from Marcus to serve new clients Management and Other Fees Incentive Fees Transaction Revenues Organic LTFB Net Sales Since 2016YE 1 Firmwide AUS Growth ($tn) $1.6 $1.5 PWM GSAM Ayco $1.4 $1.3 $1.2 $1.0 $1.0 ~$5bn ~$29bn ~$30bn 2012 2013 2014 2015 2016 2017 2018YTD 10 1 Firmwide organic LTFB Net Sales were $61bn since 2016YE, including $3bn net outflows related to merchant banking activities
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