David Solomon
Chairman and Chief Executive Officer at The Goldman Sachs Group
Thank you, operator, and good morning, everyone. Thank you all for joining us.
Before I start prepared remarks, I'd like to take a moment to touch on the devastating fires that have spread across Los Angeles. Our thoughts are with the people of L.A., including our colleagues and clients. We join everyone else in thanking the brave firefighters and first responders working tirelessly to protect that community.
Now let me turn to our results. I'm very pleased with our strong performance as we continue to serve our clients in a dynamic environment. In the fourth quarter, we generated revenues of $13.9 billion, earnings per share of $11.95, an ROE of 14.6%, and an RoTE of 15.5%. For the full year, we increased our revenues by 16% to $53.5 billion. We grew our EPS by 77% to $40.54, and improved our ROE by over 500 basis points to 12.7%, demonstrating strong operating leverage.
Before we review our financials in detail, I will start today's presentation with a strategic update. Beginning on Page 1, we have a clear purpose at Goldman Sachs. We aspire to be the world's most exceptional financial institution, united by our shared values of client service, partnership, integrity and excellence. These values are the foundation of our strategy and enable us to deliver for our clients and our shareholders.
As shown on Page 2, our interconnected client franchises are at the core of our growth strategy. Our Global Banking & Markets business is distinguished by its scale, profitability and leadership positions. In investment banking, we once again ended the year as the #1 M&A advisor. In markets, we have the #1 equities business and a leading FICC franchise. These leadership positions have been built over decades of investment, and they reflect the confidence and trust that our clients have in us.
Our Asset & Wealth Management business is comprised of a leading global active asset manager, a top 5 alternatives franchise and a premier ultra-high net worth wealth management business. This scaled business is over $3.1 trillion in assets under supervision with global breadth and depth across products and solutions. Importantly, our One Goldman Sachs operating philosophy drives the interconnectedness between these two world-class businesses, enabling us to seamlessly deliver a variety of unique solutions and execution capabilities to our clients.
Turning to Page 3. Delivering excellence to our clients is only possible because rates assets, our people, their exceptional focus and dedication supported by our culture of collaboration and excellence is critical in solving our clients' most consequential problems. Our people, history and culture have made Goldman Sachs an aspirational brand around the globe, which allows us to attract quality talent across the organization from our summer interns all the way to our partners, and we invest heavily in our people. Many of them have long careers at the firm, exemplified by the fact that over 40% of our partners started as campus hires.
Of course, not all of our people stay at Goldman Sachs for their entire careers. Many leave for opportunities to be at other companies and investment firms. And these firms, in turn, often become important clients of Goldman Sachs. Today, more than 275 of our alumni are in C-suite roles at companies with either a market cap greater than $1 billion or assets under management of over $5 billion, and hundreds of other alumni end up coming back to the firm as Boomerang hires, including roughly 25 partners and managing directors last year alone, a testament to our enduring brand and culture. All in, we have an exceptional client franchise supported by our best-in-class talent and culture, which enables us to drive our strategy forward, and it is critical that we continue to invest in our people.
Now turning to Page 4. At our first Investor Day in 2020, we laid out a comprehensive strategy to strengthen and grow the firm. We also laid out a number of targets that we could be held accountable for our progress. Today, the evidence is clear. We have met or exceeded almost all of these targets. We have grown our revenues from $37 billion to $54 billion, nearly 50% on improving the durability of those revenue streams. The Global Banking & Markets, we've maintained our position as the leading M&A advisor in investment banking and have improved our standing with the top 150 clients in FICC and equities over the past five years.
At the same time, we've significantly increased our more durable FICC and equities financing revenues which together have grown at a 15% CAGR to a new record of $9.1 billion this year. In Asset & Wealth Management, we've consistently grown our more durable management and other fees in private banking and lending revenues, both of which were record in 2024. Notably, management and other fees surpassed $10 billion, exceeding our 2024 target.
In addition, alternatives fundraising surpassed $70 billion. The success is a direct result of our continued innovation developing new strategies and our long-standing track record of investment performance. Additionally, we further narrowed our strategic focus. We closed on the sale of GreenSky, entered into an agreement with General Motors to transition their credit card program and sold our portfolio of seller financing loans.
Turning to Page 5. Global Banking & Markets, our leading franchise has produced average revenues of $33 billion, and an average ROE of 16% over the last five years across a variety of market environments, demonstrating the diversity and strength of this business. While no one has a crystal ball, there are a number of catalysts that we believe will continue to drive activity. There has been a meaningful shift in CEO confidence, particularly following the results of the U.S. election. Additionally, there is a significant backlog from sponsors and an overall increased appetite to dealmaking supported by an improving regulatory backdrop. The combination of these conditions should spur further activity in 2025.
One large strategic opportunity we are particularly focused on relates to financing. Goldman Sachs operates the fulcrum of one of the most important structural trends currently taking place in finance. The emergence and growth of our private credit and other asset classes that can be privately deployed. Our unique origination capabilities position us to both connect companies' dependable capital and connect investors to assets that can produce superior returns.
Earlier this week, we announced the formation of our Capital Solutions Group, which will harness the power of One Goldman Sachs to provide our clients a comprehensive suite of our financing, origination, structuring and risk management offerings across both public and private markets. We are taking the current capabilities of our financing group adding coverage of financial sponsors and alternative asset management firms to better innovate and accelerate the delivery of services to clients. We are also creating an alternatives origination group focused on sourcing to provide seamless coverage to our private credit and private equity clients. We are excited about providing our clients with access to differentiated sourcing and investment capabilities, which will in turn help us accelerate growth across the franchise.
Now let me turn to Asset & Wealth Management on Page 6. Our assets under supervision reached another record, reflecting our 28th consecutive quarter of long-term fee-based net inflows. In Wealth Management, our total client assets rose to $1.6 trillion. We also bolstered our durable revenue streams. Management and other fees and private banking and lending revenues together have grown at a CAGR of 12% since 2019, and we continue to expect to drive high single-digit annual growth in the coming years.
Turning to Page 7. We meaningfully improved our AWM pretax margin in 2024, achieving our medium-term target. In our journey to further improve the return profile of the firm, we are committed to driving this business towards mid-teens returns. We see significant growth opportunities across wealth management, alternatives and solutions.
In Wealth Management, we are growing this business by increasing the number of advisors in the field and surrounding them with content specialists. We are expanding our loan product offerings, and we're elevating our overall client experience with further investment in our digital capabilities. In alternatives, we are scaling our flagship fund program and developing new strategies. We remain focused on penetrating the institutional client base and expanding our wealth channel. Additionally, we are investing in tailored solutions for institutional and third-party wealth clients who continue to see customization across SMAs, direct indexing, and ETFs in a structured form.
On Page 8, we demonstrate the durability of the revenues across the firm. This is not the first time we've laid out this information, but it serves as a good reminder. Baseline revenues are shown in gray, which represents sum of the trailing 10-year lows for each of the businesses that are considered to be more cyclical, advisory, underwriting and intermediation. As I said last year, we believe this is a very conservative measurement because it's unlikely that every one of these businesses would ever hit a low point all at the same time.
In the 25 years since we became a public company, it hasn't happened once. The dark blue represents more durable revenues from financing, management and other fees as well as private banking and lending, which grew 13% versus 2023. Taken together, these two components made up approximately 70% of total revenues in 2024. In addition, given our diversified franchise, we have consistently demonstrated our ability to generate upside across different market environments, which further highlights the revenue-generating power of our firm.
Moving to Page 9. Operating efficiency remains one of our key strategic objectives. And while we have made progress, we believe there are significant opportunities to drive further efficiencies across our business. We've established a three-year program as a part of our business planning process that will help us dynamically manage our expense base, harness technology and automation and reinvest in our businesses.
First, we are optimizing our organizational footprint by expanding our presence in strategic locations and calibrating our pyramid structure. Second, on spend management, we are optimizing transaction-based expenses and looking to more efficiently manage our vendor and consultant relationships. We will also continue to reduce operating expense associated with our consolidated investment entities as we further sell down those assets. Lastly, we were leveraging AI solutions to scale and transform our engineering capabilities, simplify and modernize our technology stack, drive productivity. These efficiencies will allow us to further invest for growth and improve client experience.
Moving to Page 10. We believe the path to our return targets is straightforward. First, we have demonstrated our ability to deliver mid-teens returns on our leading Global Banking & Markets franchise. Second, we are making strong progress against our plan to drive asset wealth management to mid-teens and beyond. And lastly, we are driving platform solutions to pretax breakeven in 2025. Taken together, we have a clear path to producing our target returns, which will further unlock shareholder value.
Before turning it over to Denis, I want to spend a moment on regulation. Last month, trade groups representing the major U.S. banks, including Goldman Sachs, filed suit against the Federal Reserve. We have long been concerned that the lack of transparency and the Fed's current stress testing creates uncertainty and at times produces results we cannot understand and which can lead to higher industry-wide borrowing costs, reduced market liquidity and inefficient capital allocations.
For the industry, the bar to take this step was incredibly high. And while the Fed has announced that it's seeking to improve the stress test, the suit was filed to protect our rights. We believe it is our responsibility to continue to press for a more transparent regulatory process in order to foster a more efficient financial system that supports growth and competitiveness of the U.S. economy.
In closing, I'm very confident about the trajectory of Goldman Sachs. We are incredibly well positioned to serve our clients and to continue to drive strong returns for shareholders as we execute with a relentless emphasis on client service, partnership, integrity and excellence.
Let me now turn it over to Denis to cover our financial results in more detail.
