EARNINGS PER COMMON SHARE OF $12.14 FOR 2015;
RMBS WORKING GROUP SETTLEMENT (1) REDUCED
EARNINGS PER COMMON SHARE BY $6.53
FOURTH QUARTER EARNINGS PER COMMON SHARE WERE $1.27;
RMBS WORKING GROUP SETTLEMENT (1) REDUCED EARNINGS PER COMMON SHARE BY $3.41
NEW YORK, January 20, 2016 - The Goldman Sachs Group, Inc. (NYSE: GS) today reported net
revenues of $33.82 billion and net earnings of $6.08 billion for the year ended December 31, 2015.
Diluted earnings per common share were $12.14 compared with $17.07 for the year ended
December 31, 2014. Return on average common shareholders’ equity (ROE) (2) was 7.4% for 2015.
During 2015, the firm recorded provisions for the settlement with the RMBS Working Group (1) of
$3.37 billion ($2.99 billion after-tax), which reduced diluted earnings per common share by $6.53 and
ROE by 3.8 percentage points.
Fourth quarter net revenues were $7.27 billion and net earnings were $765 million. Diluted earnings
per common share were $1.27 compared with $4.38 for the fourth quarter of 2014 and $2.90 for the
third quarter of 2015. Annualized ROE (2) was 3.0% for the fourth quarter of 2015. During the fourth
quarter of 2015, the firm recorded provisions for the settlement with the RMBS Working Group (1) of
$1.80 billion ($1.54 billion after-tax), which reduced diluted earnings per common share by $3.41 and
annualized ROE by 8.1 percentage points.
Annual Highlights
Goldman Sachs ranked first in worldwide announced and completed mergers and acquisitions for
the year. During the year, the firm advised on completed transactions valued at more than
$1 trillion. The firm also ranked first in worldwide equity and equity-related offerings and common
stock offerings for the year. (3)
Investment Banking produced net revenues of $7.03 billion, its second highest annual
performance, as net revenues in Financial Advisory were the highest since 2007.
Investment Management generated record net revenues of $6.21 billion, as assets under
supervision (4) increased 6% from a year ago to a record $1.25 trillion, with strong net inflows in
long-term assets under supervision of $71 billion (5) during 2015.
Book value per common share increased by 5% during the year to $171.03.
The firm maintained strong capital ratios and liquidity. As of December 31, 2015, the firm’s
Common Equity Tier 1 ratio (6) as computed in accordance with the Standardized approach and
the Basel III Advanced approach was 13.6% (7) and 12.4% (7), respectively. In addition, the firm’s
global core liquid assets (4) were $199 billion (7) as of December 31, 2015.
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“We are pleased that our diversified business mix allowed us to deliver solid results in a year
characterized by uneven global economic activity,” said Lloyd C. Blankfein, Chairman and Chief
Executive Officer. “Looking ahead, we believe our strong global client franchise leaves us well
positioned to generate superior returns over the long term.”
Investment Banking
Full Year
Net revenues in Investment Banking were $7.03 billion for 2015, 9% higher than 2014. Net revenues in Financial Advisory were $3.47 billion, 40% higher than 2014, reflecting strong client activity, particularly in the United States. Industry-wide completed mergers and acquisitions increased significantly compared with the prior year. Net revenues in Underwriting were $3.56 billion, 11% lower compared with a strong 2014. Net revenues in debt underwriting were lower compared with 2014, reflecting significantly lower leveraged finance activity. Net revenues in equity underwriting were also lower, reflecting significantly lower net revenues from initial public offerings and convertible offerings, partially offset by significantly higher net revenues from secondary offerings. The firm’s investment banking transaction backlog increased compared with the end of 2014. (4)
Fourth Quarter
Net revenues in Investment Banking were $1.55 billion for the fourth quarter of 2015, 7% higher than the fourth quarter of 2014 and essentially unchanged compared with the third quarter of 2015. Net revenues in Financial Advisory were $879 million, 27% higher than the fourth quarter of 2014, reflecting an increase in client activity in the United States. Net revenues in Underwriting were $668 million, 11% lower than the fourth quarter of 2014, due to significantly lower net revenues in equity underwriting, reflecting lower client activity. This decrease was partially offset by higher net revenues in debt underwriting, reflecting higher net revenues from investment-grade activity. The firm’s investment banking transaction backlog increased compared with the end of the third quarter of 2015. (4)
Institutional Client Services
Full Year
Net revenues in Institutional Client Services were $15.15 billion for 2015, essentially unchanged compared with 2014.
Net revenues in Fixed Income, Currency and Commodities Client Execution were $7.32 billion for 2015, 13% lower than 2014. Excluding a gain of $168 million in 2014 related to the extinguishment of certain of the firm’s junior subordinated debt, net revenues in Fixed Income, Currency and Commodities Client Execution were 12% lower than 2014, reflecting significantly lower net revenues in mortgages, credit products and commodities. These decreases were partially offset by significantly higher net revenues in interest rate products and currencies. During 2015, Fixed Income, Currency and Commodities Client Execution operated in a challenging environment generally characterized by difficult market-making conditions, as well as low levels of client activity in mortgages and credit.
Net revenues in Equities were $7.83 billion for 2015, 16% higher than 2014. Excluding a gain of $121 million ($30 million and $91 million included in equities client execution and securities services, respectively) in 2014 related to the extinguishment of certain of the firm’s junior subordinated debt, net revenues in Equities were 18% higher than 2014, primarily due to significantly higher net revenues in equities client execution across the major regions, reflecting significantly higher results in both derivatives and cash products, and higher net revenues in securities services, reflecting the impact of higher average customer balances and improved securities lending spreads. Commissions and fees were essentially unchanged compared with 2014. During 2015, Equities operated in an environment generally characterized by improved client activity levels.
The fair value net gain attributable to the impact of changes in the firm's credit spreads on borrowings was $255 million ($214 million and $41 million related to Fixed Income, Currency and Commodities Client Execution and equities client execution, respectively) for 2015, compared with a net gain of $144 million ($108 million and $36 million related to Fixed Income, Currency and Commodities Client Execution and equities client execution, respectively) for 2014.
Fourth Quarter
Net revenues in Institutional Client Services were $2.88 billion for the fourth quarter of 2015, 9% lower than the fourth quarter of 2014 and 10% lower than the third quarter of 2015.
Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.12 billion for the fourth quarter of 2015, 8% lower than the fourth quarter of 2014, primarily due to significantly lower net revenues in commodities, partially offset by significantly higher net revenues in interest rate products. In addition, net revenues in mortgages and currencies were lower, while results in credit products improved compared with a weak fourth quarter of 2014. During the quarter, Fixed Income, Currency and Commodities Client Execution continued to operate in an environment characterized by low levels of client activity and difficult market-making conditions.
Net revenues in Equities were $1.76 billion for the fourth quarter of 2015, 9% lower than the fourth quarter of 2014, primarily reflecting significantly lower net revenues in equities client execution, due to significantly lower net revenues in cash products and lower net revenues in derivatives. In addition, commissions and fees were lower, reflecting lower volumes. These results were partially offset by significantly higher net revenues in securities services, primarily reflecting improved securities lending spreads. As compared with the third quarter of 2015, Equities operated in an environment generally characterized by an increase in global equity prices and lower client activity levels.
The fair value net loss attributable to the impact of changes in the firm's credit spreads on borrowings was $68 million ($54 million and $14 million related to Fixed Income, Currency and Commodities Client Execution and equities client execution, respectively) for the fourth quarter of 2015, compared with a net gain of $82 million ($55 million and $27 million related to Fixed Income, Currency and Commodities Client Execution and equities client execution, respectively) for the fourth quarter of 2014.
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