Denis Coleman
Chief Financial Officer at The Goldman Sachs Group
Thank you, David. Good morning.
Let's start with our results on Page 1 of the presentation. In the first quarter, we generated net revenues of $14.2 billion and net earnings of $4.1 billion, resulting in earnings per share of $11.58, an ROE of 14.8%, and an ROTE of 15.9%. We provide details on the financial impact of selected items in the bottom table, the aggregate of which was immaterial this quarter.
Let's turn to performance by segment, starting on Page 3. Global Banking and Markets produced revenues of $9.7 billion in the first quarter and generated an 18% ROE on a fully allocated basis.
Turning to Page 4. Advisory revenues of $1 billion were up versus a year ago amid higher completed transactions. We remain number one in the league tables for both announced and completed M&A. Equity underwriting revenues of $370 million and debt underwriting revenues of $699 million, both rose significantly year-over-year amid an increase in industry volumes. Our backlog fell quarter-on-quarter as we successfully brought transactions to market, though client engagement and dialogues remain robust. FICC net revenues were $4.3 billion in the quarter, up from a strong performance last year as our global scaled franchise continued to serve clients amid a dynamic operating environment. Intermediation results were driven by better performance in mortgages, credit, and currencies.
Our long history of risk-taking acumen enabled us to effectively make Markets across a number of different geographies and asset classes. We produced record FICC financing revenues of $852 million, which rose sequentially primarily on better results in repo. We remain confident in our ability to continue to grow balances and drive growth in this business over time. Equities net revenues were $3.3 billion in the quarter. Equities intermediation revenues of $2 billion rose 14% year-over-year on better performance in derivatives. Equities financing revenues of $1.3 billion were modestly higher year-over-year as record average prime balances during the quarter were only partially offset by lower financing spreads.
Moving to Asset and Wealth Management on Page 5. Revenues of $3.8 billion were 18% higher year-over-year. Record management and other fees were up 7% year-over-year to $2.5 billion. As a reminder, we closed the sale of Personal Financial Management in November of last year, which contributed approximately $60 million in fees in the year-ago period. Incentive fees for the quarter were $88 million, up sequentially and year-over-year. Based on our bottoms-up analysis, we expect to reach our target of $1 billion in annual incentive fees over the medium term, supported by an estimated $3.8 billion of unrecognized incentive fees as of year-end. Private banking and lending revenues were $682 million, up substantially as revenues in the prior year period were negatively impacted by the partial sale of our Marcus loan portfolio. Equity investments and debt investments revenues totaled $567 million. In equity investments, we saw improved performance year-over-year in our private portfolio that was largely offset by a markdown on a large public position.
Now moving to Page 6. Total Assets Under Supervision ended the quarter at a record $2.8 trillion. We had $24 billion of long-term net inflows, largely in fixed income, representing our 25th consecutive quarter of long-term fee-based inflows.
Turning to Page 7, on Alternatives. Alternative Assets Under Supervision totaled $296 billion at the end of the first quarter, driving $486 million in management and other fees. Gross third-party fundraising was $14 billion in the quarter. We continue to expect to raise between $40 billion and $50 billion in Alternatives across private equity and other strategies this year. More broadly, we are leveraging our long-standing leadership position in private credit to capitalize on this secular growth opportunity and expect to grow our assets from roughly $130 billion to $300 billion over the next five years. On-balance sheet Alternative investments totaled approximately $44 billion. In the first quarter, we reduced our historical principal investment portfolio by $1.5 billion to $14.8 billion. We expect reductions at roughly this pace for the rest of 2024 and expect to sell down the vast majority of our HPI portfolio by the end of 2026 consistent with our target.
Next, Platform Solutions on Page 8. Revenues were $698 million. Overall, segment profitability has improved with a pre-tax net loss of $117 million for the quarter. In line with our target, we expect to drive this business to pre-tax breakeven next year.
On Page 9, firmwide net interest income was $1.6 billion in the first quarter, up sequentially on an increase in interest-earning assets. Our total loan portfolio at quarter-end was $184 billion, roughly in line with the fourth quarter, as an increase in other collateralized lending was partially offset by the sale of the remaining GreenSky portfolio. Our provision for credit losses was $318 million, which reflected net charge-offs in our credit card lending portfolio. Within our wholesale portfolio, impairments trended modestly lower versus the levels in the last few quarters.
Turning to Page 10. We continue to provide additional information detailing our CRE exposure. As you know, we moved early in actively risk managing our CRE exposure and currently have $26 billion in loans, $4 billion in AWM alternative equity and debt securities, and $2 billion in equity at-risk related to CIEs.
Turning to expenses on Page 11. Total quarterly operating expenses were $8.7 billion, resulting in an efficiency ratio of 60.9%. Our compensation ratio net of provisions was 33%, reflecting improved operating performance for the firm. Non-compensation expenses were $4.1 billion. These costs declined year-on-year, even inclusive of a $78 million FDIC special assessment charge, and were down sharply versus the fourth quarter. Our effective tax rate for the quarter was 21.1% and for the full year, we expect a tax rate of approximately 22%.
Now on to Slide 12. Our Common Equity Tier-1 ratio was 14.7% at the end of the first quarter under the standardized approach. In the quarter, we returned $2.4 billion to shareholders, including common stock repurchases of $1.5 billion and common stock dividends of $929 million. We are currently running with a 170 basis point buffer above our capital requirements. Given expectations for significant modifications to the Basel III proposed rule, we should have materially more flexibility on capital deployment. We also remain committed to paying our shareholders a sustainable and growing dividend.
In conclusion, our first quarter results reflect the strength of our leading Global Banking and Markets franchise and our growing Asset and Wealth Management business. Simply put, we are delivering on the things we said we would do. We are focused on our strategic objectives and the execution focus areas for 2024 that we laid out in January, which will help our businesses produce mid-teens returns through the cycle. We are confident in our ability to deliver for shareholders while continuing to support our clients and remain optimistic about the future opportunity set for Goldman Sachs.
With that, we'll now open up the line for questions.
