Goldman Sachs Presentation to Credit Suisse Financial Services - PowerPoint PPT Presentation

Goldman Sachs Presentation to Credit Suisse Financial Services Conference Lloyd C. Blankfein Chairman and Chief Executive Officer February 10, 2015

Cautionary Note on Forward-Looking Statements Today’s presentation may include forward - looking statements. These statements represent the Firm’s belief regarding future events that, by their nature, are uncertain and outside of the Firm’s control. The Firm’s actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements. For a discussion of some of the risks and factors that could affect the Firm’s future results and financial condition, please see the description of “Risk Factors” in our annual report on Form 10 -K for the year ended December 31, 2013. You should also read the forward-looking disclaimer in our quarterly Form 10-Q for the period ended September 30, 2014, particularly as it relates to estimated capital and leverage ratios, and information on the calculation of non-GAAP financial measures that is posted on the Investor Relations portion of our website: www.gs.com. The statements in the presentation are current only as of its date, February 10, 2015.

2015 State of the Franchise Where we’ve been, and where we’re headed Strong Capitalize Operating Financial on the Strategy Foundation Forward  Maintain franchise  The starting point of  Well positioned for and target new everything we do future growth opportunities opportunities — Helps ensure  Efficiently manage — Significant embedded stability and the levers we can: positions for operating leverage Capital & Expenses opportunity  Defend returns in a — Positions firm to challenging add value when it environment matters most 1

Significantly Improved Financial Profile Safety & Operating Capitalize on Soundness Strategy Opportunities 4Q07 4Q14 Balance -24% $1,120bn $856bn Sheet Underpinning these improvements are new regulations that lock-in liquidity and capital at historically high levels Common +85% $40bn $74bn and reduce risk Equity  Basel III Capital Requirements  Supplementary Leverage Ratio Gross -61% 26.2x 10.3x Leverage  CCAR Stress Test  Total Loss Absorbing Capacity $61bn 1 +3.0x Liquidity $183bn  Liquidity Coverage Ratio  Net Stable Funding Ratio Level 3 -39% $69bn $42bn Assets 1 Prior to 4Q09, GCE reflects loan value and subsequent periods reflect fair value 2

Institutional Focus Drives Revenue Opportunities Safety & Operating Capitalize on Soundness Strategy Opportunities Industry Business Industry Business Estimated US Peer Average Activities GS Activities 2014 Net Revenue Breakdown 2014 Net Revenue Breakdown 3 Capital Markets 1 Capital Markets 1 Asset Asset Retail Management Management <10% 2 Investing Investing Institutional Retail ~50% Private Wealth ~50% Commercial Institutional Management Banking 90+% Treasury Services Mortgage Servicing Private Wealth Management Mortgage Originations Balance Sheet $856bn Balance Sheet $1,832bn Consumer Banking Employees 4 34,000 Employees 190,000 Retail Brokerage GS is institutionally focused on capital markets with significant Credit Cards concentration of our businesses across a small number of key entities 1 Comprised of investment banking and market-making in equities, fixed income, currencies and commodity products 3 2 Reflects revenues from Private Wealth Management, inclusive of lending to high net worth clients 3 US peers comprised of BAC, C, JPM, and MS 4 Total Staff

Diversified Client-Driven Franchise Safety & Operating Capitalize on Soundness Strategy Opportunities Investment Banking Investment Management 2014 Net Revenues ■ ~14,000 clients across PWM, ■ More than 8,000 clients Institutions and Third Party globally in nearly 100 countries Distributors and a broad range of industries ■ Average PWM account size of ■ >$40mm #1 ranked merger advisor and ■ Strong investment performance equity underwriting franchise 17% 19% for clients with 75% of mutual ■ Advice, capital raising, hedging fund assets ranked in the 1 st or and risk management solutions 2 nd quartiles over 5 years ■ Global, broad and deep offering managing assets in all major asset classes and serving 20% clients in over 120 countries 25% FICC Investing & Lending Institutional Client Services 19% ■ ~7,000 active clients, up 12% ■ Diversified investments: Equities since 2010 — Private Equity ■ Leading franchise in both FICC — Mezzanine Debt and Equities — Senior Loans ■ Comprehensive suite of — Real Estate capabilities — Infrastructure — Liquidity provisioning ■ Generating strong risk-adjusted — Execution returns from Investing & — Trade analytics Lending portfolios over the long-term 4

Case Study: Institutional Client Services Safety & Operating Capitalize on Soundness Strategy Opportunities Contribution to ICS Revenues (2010 – 2014) 21% 17% 19% 18% 17% 16% 16% 16% 14% 15% 14% Max. 11% 12% 11% 11% 11% 9% Avg. 9% 9% 8% 8% 7% Min. 5% 4% Commodities Currencies Interest Rate Credit Mortgages Equities Client Commissions Securities Products Products Execution and Fees Services  A decade ago, we consolidated our management of FICC and Equities to run our businesses in aggregate — Consistent with our clients who use multiple products, our approach provides efficiency, better content and idea generation — Allows us to respond to changes in client activity  Balanced offering provides stability to revenues, earnings and returns Over the past 5 years, no business has contributed more than 21% or less than 4% of ICS revenues on an annual basis 5

Variable Cost Structure Safety & Operating Capitalize on Soundness Strategy Opportunities 2000 – 2014 GS Firmwide Net Revenue and Compensation Expense Relationship $50 2000 – 2014 $40 R 2 = 91% $30 ($bn) $20 $10 $0 1 2000 2002 2004 2006 2008 2010 2012 2014 Firmwide Net Revenues Compensation Expense  Our culture of paying for performance stems from our unique partnership culture, dating back to when the firm was a private institution Our variable cost structure provides a competitive advantage and a valuable lever to protect the firm 1 2008 includes December 6

Superior Earnings Performance and Stability Safety & Operating Capitalize on Soundness Strategy Opportunities Balanced revenue mix coupled with flexible compensation expense and conservative risk management has driven more stable earnings compared to peers 2005 – 2014 GS and US Peer Earnings Volatility 1  Diversified businesses ~130% — Across products and geography  Variable cost structure — Discretionary compensation ~50%  Strong risk management track record — Robust and comprehensive GS US Peers stress testing 1 US peers comprised of BAC, C, JPM and MS; earnings volatility measured by the standard deviation of reported annual net income to common relative to average annual net income to common; 7 calculation includes December 2008 for GS and MS

Improvement of Absolute Performance Safety & Operating Capitalize on Soundness Strategy Opportunities Despite operating in a more challenging revenue environment, GS has continued to deliver best-in- class returns while significantly growing our capital Total Net Revenues ($bn) vs. 2012YE ROE Range: 10.7% – 11.2% EPS Growth: +21% $34.5 $34.2 $34.2 BVPS Growth: +13% Dividend Growth: +27% $16bn Cumulative Buybacks: +~200bps Common Capital Ratio 1 : 2012 2013 2014 1 2014YE Basel III Common Equity Tier 1 Ratio computed on a fully phased-in basis under the advanced approach compared with 2012YE computed under Basel International Standards 8

Net Revenue Replacement Safety & Operating Capitalize on Soundness Strategy Opportunities While prudently managing expenses and capital we have successfully replaced revenue streams Net Revenue Growth 2012 – 2014 ($mm) $34,528 $34,163 $213 $586 $1,084 $408 $31,872 $2.3bn of 2012 net revenues from businesses and investments we have since exited 1 2012 Reported REDI and Hedge Fund Americas ICBC 2012 Adjusted 2014 Reported 2 Net Revenues European Admin Business Reinsurance Net Revenues Net Revenues Insurance 1 Net revenues from businesses and investments we have exited reflect both operating net revenues and gains on sales 9 2 Includes $494mm gain on sale

Improved Operating and Capital Efficiency Safety & Operating Capitalize on Soundness Strategy Opportunities During the low part of the cycle, the focus is on expense and capital management Capital Management Expense Management Total Capital Return as % Total Payout GS Compensation Ratio and Net Revenues Ratio: 2009-2014 1,2 of 2009 Common Equity 3 $45.2 $46.0 +2.7x $34.5 69% $16.6 +4.5x 50% -910bps 2000-2007 Average: 47.3% 49.4% 2009-2014 Average: 38.2% 26% 43.9% 36.8% 35.8% 11% US Peer GS US Peer GS Average Average 2000 2007 2009 2014 GS basic share count has declined ~17% since 4Q09 Compensation Ratio Firmwide Net Revenues ($bn) and is just 6% above our record low in 3Q07 4 1 US Peers comprised of C, JPM and MS 10 2 Reflects total repurchases of common stock and total dividends to common shareholders 3 US Peers comprised of BAC, C, JPM and MS 4 Basic common shares outstanding includes common stock and RSUs for which no future service is required as a condition to the delivery of the underlying common stock