Cautionary Note on Forward-Looking Statements

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Transcription:

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 current annual report on Form 10-K for our fiscal year ended December 2011. You should also read the 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 12, 2013. +$3.2bn 1

Goldman Sachs Presentation to Harvey Schwartz Chief Financial Officer February 12, 2013

Firmwide Approach to Regulatory Change Guidelines Clients Drive Strategy and dexecution Our clients drive our revenue opportunities Clients dictate how they want to transact Staying closely connected to client activity and responding quickly is critical Constructive interaction with clients, regulators and other market participants Engage History of adapting our organizational structure and mandates to meet client needs Supported by culture of collaboration, client and results-driven focus and execution No one has a crystal ball Predicting the Future Investing too much, too early can be very expensive and counterproductive Responding too late can also be costly 31

Organizational Structure Firmwide Focus on Regulatory Preparedness Firmwide Regulatory Reform Executive Committee Regional Working Groups Recovery & Resolution Plans Volcker Granular Subcommittees Derivatives Capital Implementation Review Groups Legal Entity Structure Liquidity & Funding Senior Engagement 1. Includes selected clients, regulators and other trade associations Clients 1 Asset A t Managers Corporates Hedge Funds Pension Funds Regulators 1 Federal Reserve SEC CFTC FDIC UK FSA European Commission Basel IOSCO Trade Associations 1 SIFMA/AFME ISDA 42

Mortgages Crossroads Adapting to Changing Environment Basel 3 Capital Requirements Versus Basel 1 25% less 2 ~260% ~170% December 2, 2011 June 7, 2012 2.5 NPR Released 1 Final Market Risk Rule 1 Adjust Adjust Wait Wait Exit the Business Exit the Business 1. The percentage changes are relative to the capital requirements under Basel 1 for just the Mortgages Business Unit 2. Percentage decline represents the change in capital requirements between the Final Market Risk Rule and the 2.5 NPR 53

Capital Efficiency Mortgages Franchise Efficiency Case Study December 2011 February 2012 June 2012 October 2012 Basel 2.5 NPR Released Began Developing Technology Related to Requirements Basel 2.5 NPR Finalized, Tools Provided to our Traders Achieved Improved Capital Efficiency Working group Leverage single Provided tool that Made decisions evaluated potential outcomes tech platform Sec DB coincided with the release of the final rule to drive capital efficiency Maintained conservative risk profile in light of potential for increased capital requirements Focus on CUSIP level granularity Took 6 months to create 64

Capital Efficiency Tool Management Tools A Firm Total Securities Division Franchise Equities Franchise FICC Franchise Interest Rate Products Currencies C Commodities Global Credit Mortgages B 10,000 20,000 5,000 35,000 A Both top down tool for senior management and a bottoms up tool for business heads B Variety of metrics can be analyzed over time C Allows you to look at capital usage across our businesses, products and regions D Mortgages s Franchise Trading 9EQ24B5P1 CUSIP #1 CUSIP 9EQ2185V8 #2 CUSIP 9EQ0XBG48 #3 9EQ451RC82 CUSIP #4 2,500,000 D Provides detailed attribution at business, desk and CUSIP level Data is shown for illustrative purposes only 75

Capital Efficiency Tool Rule Explanation Tools Specific Risk Calculation Tool 9LN01HV24 1.6% 12,000,000.00 9LN029637 1.0% 13,000,000.00, 90213G207 8.0% 15,000,000.00 9LN00LYM9 1.6% 17,500,000.00 221597AF4 0.25% 18,200,000.00 The specific risk calculation tool provides our professionals with background on the drivers of our capital requirements Users are able to get details including the type of product, issuer details, seniority and selected ratings Data is shown for illustrative purposes only 86

Capital Efficiency Tool Desktop Specific Tools OTC Capital by Clients Sensitivity Analysis B Public Data D TOTAL CLIENT 1 CLIENT 2 A 1,000 2.0% 20 100 120 1 AA+ 8 (22) (10) 0 CLIENT 3 CLIENT 4 CLIENT 5 CLIENT 6 CLIENT 7 CLIENT 8 CLIENT 9 CLIENT 10 C E A Clients D Margin Period of Risk (weeks) B Calculated Capital including CVA VaR and Effective Expected Positive Exposure E Estimated Impact of Change to MPOR C Lowest Rating of S&P, Moody s and Fitch Data is shown for illustrative purposes only 97

Evolution of Our Mortgages Business Amidst difficult market backdrop, while earnings have been challenged relative to 2010, adjusted resource allocation capital efficiency protects returns Headcount 2008 2012 2010 2012 1Q12 4Q12 VaR CSW 1 Revenue Pre-Tax Earnings Basel 3 Capital -14% -15% -22% -24% -40% -38% -76% 1. Credit Spread Widening stress test 108

Key Areas of Focus Information enhances decision making Technology Technology must be deployed at a granular level Leverage the benefits of a single risk system, SecDB Understand our clients needs Client Needs Determine how clients want to transact Understand impact on market structure Execution Core group focuses intensely on regulation and execution while broader firm focuses on client engagement Reacting quickly once we have clarity is critical Requires significant collaboration Our culture and people will enable us to engage, adapt and execute in a changing competitive landscape 119

Goldman Sachs Presentation to Harvey Schwartz Chief Financial Officer February 12, 2013