Operator: Thank you. We’ll go next to Mike Mayo with Wells Fargo.
Mike Mayo: Hi. David, you reiterated the desire for Goldman to have a more narrow strategic focus, but you still have some cleanup from the past charges this quarter for GreenSky, the GM Card, Platform Solutions still lost $117 million. So I’m just trying to figure out in this context where transaction banking stands. I mean, you had 8% year-over-year growth. So, that’s decent. But three years ago, March 1st, you guys said transaction banking, you’re building global payments around the world. And then March 8th of this year on Bloomberg, it says that you’re closed in Japan and now you’re focusing on the US and Europe. So on the one hand, are you simply pulling back your ambitions? On the other hand, maybe you have more financial discipline. You’re making sure these adjacent activities are generating profits instead of just growth.
David Solomon: Look, Mike, I think you summarized it well. I think it’s yes to a bunch of the things that you said. We’re looking hard — we are — I think it’s very important for me to say that we’re very committed to transaction banking. We think we’ve got very, very good technology and a good platform that we can grow and continue to scale over time. But there’s no question we’re very focused on making sure that we execute appropriately and that it’s not just top-line growth that it delivers profitability. It’s something that sits in our client franchise and adds to the portfolio of things that we can bring to our clients. I think some of the ambitions might have been too broad in terms of our ability to execute immediately.
And so we’ve narrowed that, but we remain committed, focused, and growing. And I think this is a medium and longer-term project that we will deliver on. It’s small, but I think we’ve got the right focus. We made a hire to bolster the expertise in the leadership and we’re moving forward on that strategy. And with respect to the cleanup, we continue to narrow and cleanup. The after-tax loss from the platforms was less than $100 million. We’ve said clearly that we believe that we can bring the platforms to breakeven or profitability in 2025 and we’re executing against that.
Mike Mayo: Just to follow up on the transaction banking. You said some ambitions were too broad. Again, it’s better to have profitable growth than just growth. So, point acknowledged. But what happened? I mean, where were you kind of underestimating expenses or the build-out costs or what was more difficult than you had anticipated?
David Solomon: Well, I think there were a number of things, Mike, that came together. I think when you’re building new businesses, you give authority to the people that are building those businesses and you create metrics and you hold people accountable as you advance. And I think there were things where we thought we could do more globally and candidly when we really looked at the cost of executing and delivering, there was more friction in that context. And so we’ve chosen to narrow some of that in terms of the global footprint of that. That doesn’t mean later there might not be opportunity to do it, but we think for now, that’s the right action. I’d say secondarily, the regulatory environment changed massively and has also raised the bar and created headwinds in a different lens with which we look at the expansion of these kinds of activities.
And so that’s something else that went into the mix. And so look, I think one of the things that we try to do is to look at everything with facts, with data, with information to be unemotional and to be willing to say, okay, this isn’t exactly right. So we’re going to adjust. And I think we’re showing that we’re willing to adjust and make adjustments always with a goal of growing the firm and delivering for shareholders, driving profitable businesses that deliver accretive returns for shareholders. We’ll get some things right, we’ll get some things wrong. But when we look at the information of the data and it’s not exactly perfect, we’ll adjust.
Operator: Thank you. We’ll go next to Steven Chubak with Wolfe Research.
Steven Chubak: Hey, good morning. So, wanted to follow up, David, on —
Denis Coleman: Good morning.
David Solomon: Good morning.
Steven Chubak: Good morning, guys. Wanted to follow up, David, with the earlier discussion just on sponsor-related activity. Private credit fundraising remains robust, but the syndicated markets are also reopening. Just wanted to better understand what you’re seeing in terms of competition in syndicated versus private markets, how it’s impacting your IB&O franchises. And just given some of the recent price coverage, maybe just speak to your growth ambitions in the private credit space more broadly.
David Solomon: Sure. I’m going to — I’ll make a couple of comments, but I’m going to ask Denis to comment too because as you know, Denis — Denis ran these businesses for us for an extended period of time. But I’d just say first, the narrative that in some way, shape or form, this is — this is about the syndicated market versus the private market, I think is an oversimplification. As transaction volumes increase, particularly in the sponsor community, the amount of activity that will come out of the syndicated market will obviously increase meaningfully. We’re very well-positioned for that. We are one of the largest players in that and that area is operating at cyclical lows at the moment. But that’s going to continue to be a very, very important part of capital formation and it’s not going away.
