Goldman Sachs Group Barclays 24th Annual Global Financial Services Conference

Great. Very pleased to have concluding our 24th Annual Global Financial Services Conference is Goldman Sachs. From the company, David Solomon, Chairman and CEO. David, thank you for being here.

Thank you for having me. We only get two minutes?

No, that's 2:00. Oh, it's 2:00, okay.

We got three hours. I know.

Don't think we've got that.

Well, thanks for joining us. I've covered Goldman for a long time now, and we've seen a significant shift since you became CEO and set out to strengthen the core client franchise, make Goldman a more integrated firm, improve returns, and just build a more durable earnings base. Several years into that strategy, what has changed most fundamentally at Goldman?

Right. I think, Jason, you summed it up well. We're executing very well against the plan we developed back in late 2018 and 2019 to really focus on the growth of the firm and to get the client centricity and the client focus of the firm really aligned as true north. Set out a bunch of objectives to grow the businesses, figure out how to operate the firm overall more effectively, and really create a coordination ethos, which we call One Goldman Sachs, to execute against that in as competent way as possible. The results of it, we're now in the ninth year, the results of it are that we've significantly grown the firm. We've taken the revenue base from mid-30s, the expectations, we're in the 70s this year. We've created some leverage to grow the earnings more than that.

I think most importantly, we've made the overall mix of the business much more durable. We have a much broader, more diversified, more durable business. That doesn't mean in different environments there aren't certain parts of the business that can ebb and flow, but we're also given the nature of our franchises, the strengths of our franchises, when there are opportunities, like the current environment where there's more going on, we actually grow share and expand our share and capture more of the upside. I think one of the things that investors are going to see when we go through the inevitable cycles that we go through is that the base is much higher and much more durable, and much broader than it was 10, 15 years ago. It's a much more durable firm.

The whole from a leadership perspective, as we're executing now, our focus is on growing the earnings of the firm. That is our focus. I know that if we can continue to grow the revenues, you pick the base. I go into investor meetings, and everybody wants to debate, are we over-earning this, are we over-earning that? We're earning because there's an environment. Could there be an environment where you earn a little bit less? Of course. But you pick the base. I think if you look back over the last 8 years, I think we've grown the revenues based on what analyst estimates are for 2026. We've grown the revenues just less than 10% over that period. If we can grow the revenues 6%, I think we can deliver better than 10% earnings growth. You can have no debate whatsoever about the multiple.

Shareholders are going to be very happy. So this is a leadership team that's focused on continuing to expand the breadth of the business and grow the earnings, continue to make the overall business more durable, and we see room to continue to do that. One of the reasons I'm so excited about the next 3 to 5 years is when you look at what's going on with technology, it's giving us an ability to reimagine operating processes and automate in ways that both give us better efficiency, and therefore more margin in certain parts of the business and better returns. In addition, give us more capacity to invest in growth where we've actually been constrained to invest in growth over the course of the last 7 or 8 years. I can't pick the environment.

I have no idea what's going to happen environmentally 3 months from now, 6 months from now, a year from now. But I bet a lot that with a 5 to 10-year view, we can continue to grow the earnings of the firm meaningfully. I also think we're in an environment based on this technology super cycle, that we're going to see real productivity gains in the economy over the next 5 to 10 years, and Goldman Sachs is very correlated to that.

Okay. I guess you said I get to pick the base. We'll pick 2Q 2026 as the base. Record results base and everything you talked about. Over the next 3-5 years, I guess, where do you see kind of the biggest drivers for that continued growth?

I think, look, we've got two big businesses, and I think we have opportunities to drive growth in both businesses. I think one of the things that surprise people is the ability for us to continue to grow our platform and our franchise in banking and markets. We still see opportunities to do that. We also see opportunities in banking and markets to operate the business differently and get more out of it, even at the same activity levels, given what technology's allowing us to do. We're excited about that. We've said publicly that we can grow our AWM business high single digits. We're doing better than that. We're now in a place where we've talked about our ability to drive 30% margins in that business and high teens returns. The organic growth in that business is excellent.

I know you're going to ask a little bit about asset wealth. We can save it for some of those questions. You look at the scale of our platform, our fundraising capability, our flows, and we're performing very well in that business. We've also done a few interesting things inorganically that fill in gaps and accelerate some of that growth trajectory. These are two world-class businesses, Global Banking and Markets, Asset and Wealth Management. We, I think, are the leader in Global Banking and Markets. We are a top five player in Asset and Wealth Management the way it's structured, but we have a right to win in both businesses. We're a leader in both businesses.