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Welcome to our Bloomberg television and radio audiences. I'm Shanali Bassek, and I'm standing by with the chief financial Officer of Goldman Sachs, Dennis Coleman. And I know Dennis that you are deep into planning for twenty twenty five. What is your number one priority as you head into next year.
Well, first and all, let me just say welcome to the Goldman Sachs Financials Conference.
It is our thirty fifth annual.
We have over one hundred issuers here as many as fourteen hundred other guests interested in the financial sector. So a really big event and we're really happy to have Bloomberg here with us today.
In terms of our priorities as we.
Head into twenty twenty five, given our outlook and given our two world class interconnected businesses, we are really optimistic on the prospect to continue to drive growth for our clients and for Goldman Sachs. And so my number one priority is making sure that all the people of Goldman Sachs are front footed and focused on clients we can serve them as.
Best we can.
Heading into twenty twenty five, many of the other things should take care of themselves.
Front footed and ready to go. You know, if you take a look at the market reaction, you see so many investors betting on investment bank stocks. Goldman benefiting more than any any of the big six banks out there. Your stock is up more than fifty two percent this year. What does that mean in terms of what investors should expect for next year? Is that runoff justified? Is there more to come? How much activity should they expect?
So? I think what investors see is a combination of factors. They see an improving macroeconomic backdrop, They have increasing optimism about the growth trajectory in twenty twenty five, and they recognize that Goldman Sachs has established leading market share positions across both global banking and markets and asset and wealth management.
Certain of the activities within our portfolio of global banking and markets have not been performing at their ultimate potential, yet our rankings and our market share positions are absolutely top and so as we see an uptick in activity heading the two tenty twenty five, I think they appreciate that our firm, with our client franchise, should be able to drive a lot of elevated activity.
Do you think there could be some choppy waters on the road to more M and A. You look at just the last couple of weeks of the Biden administration. You see the Kroger Albertson's deal fall apart in under the weight of the FTC. You see a bigger crackdown on that Nippon Steel ustal merger from the Biden administration.
And you have.
Trump naming somebody to lead the FTC with Andrew Ferguson. Stack it all up together, do you think that there could still be headwinds to M and A given the future antitrust environment and the one that we're still making our way through today.
So I think we've seen some sustained growth in M and A activity moving towards the average levels of activity over the last ten years. There have been a number of headwinds to the unlocking of the ultimate quantum of MNA activity over the course of the last year. I think with Fergin's nominee there could be a new direction
at the FTC. Obviously, as a sitting commissioner scented with the current leadership on a number of cases, and so we could see a more favorable environment heading into twenty twenty five that could actually spur more by way of CEO confidence and in turn unlocking more investment, more activity, and provide a more favorable strategic backdrop.
Now, what is it that you're preparing for. We've had bankers tell us investment bankers across Wall Street tell us they're preparing for the return of the mega deal. Do you think big ticket, more than fifty billion dollar deals can come back at scale?
So, we historically have the leading market share in both announced and completed M and A over many, many, many years, and a big part of that franchise is doing some of the biggest deals as they present themselves for opportunities as we move into.
Twenty twenty five.
Given where the markets are, given the backdrop, given the quality of our client franchise, and given the level of engagement that we've seen post the turnover in the administration, we are optimistic about the prospect for more deal flow.
And in particular, we see through our business inquiry coming from clients for more by way of capital committed financing transactions that is, in and of itself a signal for a different type of transaction and a different level of activity dovetails very well with our capability set, and I think is reinforcing of the prospect for more deal activity.
You know, it's interesting as I sit here with you today, you also had that CPI report and an inflation report that did drive yields lower. But when you look across the horizon, you are looking at a lot of uncertainty when it comes to the industry outlook from investors. How much can that throw a wrench in the activity for next year? Are you worried about the direction of interest rates, especially if tariff policies were to drive inflation higher.
So interest rate policy is obviously a really big piece of the equation overall level of interest rates coming down. Notwithstanding the CPI print this morning, I think we're still pricing a greater likelihood of a twenty five basis point cut into the end of this year the December meeting. As we head into twenty twenty five, there are some uncertainties. We'll have to see what types of policies present themselves. We have to see how the economic growth continues to unfold.
There currently are more cuts priced into twenty twenty five, but that type of environment where you have rates coming down, you still see sustained levels of GDP growth, unemployment under control. That is a favorable backdrop for ongoing levels of deal activity.
So do you worry at the end of the day at all about the necessity for interest rate rise even next year or do you think that wouldn't even be on the table.
I'm in the business of worrying about a lot of things as a CFO, and as a CFO of Goldman Sachs, we see risks in many different places, so we're always focused on sort of counter consensus moves that could occur.
But I think the consensus that we're seeing in the way the markets are pricing things, and what we're seeing from our clients and based on their own behavior for the time being, the base case expectation is for an improved and benign backdrop, But of course the unexpected things can happen and we need to be prepared for that.
What is your biggest worry when you head into twenty twenty five.
So there are again long list of things that we need to be focused on.
The Things that are very much.
Top of mind for me in these days geopolitical risk. You know, recently we discussed and in the last week alone, we've seen, you know, government disruptions across Korea, across France, across Syria.
That's just in one week.
So it's a reminder that around the world there are levels of instability that you need to be mindful of.
I'm always quick.
To point out that cybersecurity is a risk. It's a risk that all of us experience operating in a global and interconnected world. So just off the top of my head, those will be two things I would flag for you, Shinali.
Another thing you mentioned a little earlier is that your number one priority is to get your people on their front foot for next year. What does that mean if you think about the talent story, is Goldman Sachs ready to be hiring bankers once again to capitalize on that M and A activity. How do you think about where you stand on the talent story today?
So talent is the mission critical component of Goldman Sachs. It's one of the most important things we need to be successful as a company, successful for our clients. Very proud history of attracting the best and brightest, developing them and then making sure that we create the kind of work environment client franchise that makes them feel confident they can develop long term productive career at Goldman Sachs. I think there's an excitement that they feel in terms of
the overall uptick in activity. These are professionals at the top of their game, and they want to be involved in some of the most impactful and consequential developments that occur across the global capital markets. I think they recognize that being part of our platform is a really special opportunity for them to realize their potential and serve their clients as best as they possibly can.
Does that mean it's kind of like a now hiring sign for Goldman Sachs or do you feel like you have what you need to get the job done for next year?
Fair question.
So we're always focused on ensuring that we have the absolute best people in almost every sort of sub segment of our business. We feel really good about the team we have at Goldman Sachs. We feel really good about the depth of the team that we have at Goldman Sachs. In many respects, Goldman Sacks as a talent factory. And you know, I've been at the firm almost thirty years, and we develop really highly talented professionals.
At some point they leave the firm.
And then there's another professional that steps right into the shoes and carries on the strength of our franchise in a really positive fashion.
A little earlier talking about how Goldman stock has risen well over fifty percent this year, already, you know what's going to drive the next fifty percent because you think about those drivers for your stock. Is it the M and A story, is it that push into asset and welp? What should investors be hanging their hat on.
So our story at this point is pretty simple. We have two world class businesses, both of which are positioned
to grow into twenty twenty five. On the global banking and market side, the piece of the puzzle that we could see incremental growth unlocked would be through ongoing capital markets activity, and particularly capital markets activity that is connected to strategic activity, so less by a way of plane vanilla or refinancing activity if you think about the debt markets, and more change of control or deal related activity, which
is something we're particularly good at doing for clients. We can see more of that activity that will propel growth
across that segment. We have a global, broad and deep, thick and equities business, leading positions in the equities business number one top three in thick covering the whole globe across products, that remains an attractive opportunity set for us, and the big growth engine for the firm sits within asset and wealth management, where we've communicated publicly, we expect to drive top line revenue growth high single digits across
the durable revenue streams of management, fees, private banking, and lending, and our optimism for that is is unchanged, and we continue to drive margin improvement towards our mid twenties targets and unlock better returns.
How much how.
Much will lighter regulation make a difference for you with the expectation that things would be lighter under a Trumpe administration.
Should we have lighter regulation, which I think is our expectation. I think it's the expectation of the markets that can just reduce stand in the gears of activity across industries across the.
Globe, give people more confidence that.
They can actually go out and try to affect strategic change that they need to grow their business. That should catalyze more activity across our franchise.
We in the whole.
Sector should be beneficiaries of that.
Environment, Dennis, thank you so much for joining us here at your conference. Of course, this is the Golden SAX Financial Services Conference, that is GOLDENZAC CFO Dennis Coleman