David Solomon: Sure. So in our Global Banking & Markets franchise, we still believe that we have opportunities with our focus on our execution to continue to grow our wallet share. We expanded our focus from the top 100 accounts to the top 150 accounts, and we also are expanding the granularity that we look at our accounts from the position of one, two or three as opposed to just top three. And so we still do see some wallet share opportunities but we obviously have a very strong wallet share. So that’s not most significant. We are growing our financing for our Global Banking & Markets franchise, and we expect to continue to grow that financing footprint, and we have a plan to continue to put more financial resources toward growing that financing footprint.
And we do think that it has reasonable returns. And it also creates a virtuous cycle for our client franchise in terms of our overall wallet share because we’re a significant financer with them. When you turn to Asset & Wealth Management, I think we’ve been very clear at our Investor Day, and Mark stated this, that we think we can grow the revenues in that business by high single-digits. That is driven by our continued growth in management fees over time and the continued growth in the wealth management sector, where we are experiencing good growth, and we still see good opportunities in Wealth Management to grow the franchise all over the world. And we’ve made continued progress on that journey. When you talk about private credit, we have, as you know, over $100 billion of private credit.
We’ve launched private credit vehicles. We obviously have a very powerful ecosystem when you look at Global Banking & Markets. And what we do with financing, which we think can also be an Asset & Wealth Management opportunity for growth in private credit, but we would expect significant opportunity for the growth in private credit as a part of the overall growth of our Asset & Wealth Management franchise. So those are a handful of things I’d highlight at this point.
Ebrahim Poonawala: That’s helpful. Thank you.
Operator: We’ll move to our next question from Christian Bolu with Autonomous Research. Please go ahead.
Christian Bolu: Good morning. Just another one on Basel III Endgame. I appreciate that you think it’s going to change and all that. But now that you’ve had a chance to digest the actual proposal as is, any more color on how you think it affects the competitiveness of your markets businesses? Are there any particular businesses that are more or less impacted? And then maybe give us some color on potential mitigation actions.
David Solomon: Sure, Christian. I appreciate it. I mean, I’m going to talk very high level because, again, this is all fluid. But obviously, if these rules went in place the way they’re proposed, they would have an effect of the businesses. But it’s different from business to business. There are certain activities that would meaningfully impact end users, whether they’re corporates or individuals where it would be obvious that you’d pass on cost. A corporation that wants to hedge and comes to us and we sit opposite in an uncollateralized derivative. I can’t imagine that their desire to hedge won’t still continue even if the cost of that hedge is higher. Obviously, it’s some balance, they would think about that differently. There are certain businesses where we might reduce our activity level because with the new Basel rules, the terms don’t look attractive.
But there are others, and one I’d point to that’s most obvious, which by the way, a significant part of the impact to us would be is prime, okay? There aren’t a lot of alternatives for big institutions in the prime business. There are very few in Europe, a little bit, and obviously, the Europeans, if this was implemented this way, would have an advantage. But at the end of the day, there are a handful of scale players. There are lots of scale institutions that need that service. Our belief is we’d be able to optimize and pass on pricing in a reasonable way. We’d have to look at the final rules. We’d have to adjust. So it will affect behavior. It will affect pricing. It will affect optimization. But I know everybody wants to jump to the clear answer, I think you need to see the rules, and then institutions and end users need to adapt to the new reality, whatever it is.
And it’s not binary that it only affects us or others in the industry that are obviously be a process of working through that, as we have in the past.
Christian Bolu: Got it. Thank you. That’s helpful. Maybe a question on the platform businesses here. I just have a two-part question. I guess firstly, maybe just update us on how you’re thinking about the partnership with Apple. Can the economics work for Goldman in the current states or does it make sense to further think about disposing of that partnership? And then the second question is more on the credit quality in your senior credit cards. Kind of what are you seeing in terms of credit quality in that portfolio? How does it compare to your expectations and the broader sort of credit card industry?
David Solomon: All right. I’ll start on the first part, Denis will make some comments on credit and the portfolio. First, I think we hired a gentleman, Bill Johnson, who’s got decades of experience to help us better run and better optimize the credit card portfolio, the credit card partnerships. As we’ve stated to you a number of times, and I’ll repeat it here very clearly, we’ve worked to narrow our focus. You’ve seen us execute around Marcus loans and GreenSky. Our partnerships with Apple and GM are long-term contracts, and we don’t have the unilateral right to exit those partnerships. So our focus at the moment is on managing them better, getting rid of the drag and bringing them to profitability. And we’re making progress, both in the way we run them and against the cost base that we put against them.
And Bill Johnson joining is helping with all that. We’ll continue as we go forward to work constructively with our partners and examine what’s best in the long run for Goldman Sachs. But our core focus is on reducing the drag over the course of the next 12 to 24 months and ensuring we operate them better. Denis, do you want to comment a little bit on the credit quality that we’re seeing?
Denis Coleman: Sure. What I’d add is we obviously remain very focused on the overall credit quality of the portfolio. A couple of things to bear in mind. In Consumer, the net charge-off ratio for the quarter was 5.1%, down from 5.8% last quarter and the total dollar amount of charge-offs down as well. You’ll also see that our coverage ratio now stands at 13.3%, which we think is an appropriate level, given our expectations for the portfolio. That adjustment is basically a function of GreenSky being removed from that ratio. And so now that applies to the cards portfolio, but we feel good about where that stands right now. On the overall performance of credit on the forward, we’ll continue to be focused. We made a number of adjustments to our credit underwriting box, and we’ll continue to monitor that as we move through the economic environment.
Christian Bolu: Great. Thank you.
Operator: We’ll move to our next question from Steven Chubak with Wolfe Research. Please go ahead.
Steven Chubak: Hi. Good morning, David. Good morning, Denis. So David you had alluded to increased competition for talent driving some pressure on expenses. I was hoping you could just speak to the commitment to deliver on the 60% efficiency goal? And maybe more specifically, given changes in revenue mix, some recently announced business exits and the heightened competition you cited, how that’s going to impact your ability to deliver on that 60%, if at all?
David Solomon: Yes. So we continue to be committed to the 60% efficiency ratio. But as you know, we’re moving through, we’re narrowing our focus. We’re moving through some things that we’re trying to create more transparency on, Steven, and highlight for you. I’m going to turn to Denis to make sure that we get the number right. But ex those one-off items, the efficiency ratio for the quarter would have been?
