Gerard Cassidy: Okay, very helpful. And then as a follow-up, it’s not a big line item obviously for you folks. But can you share with us some of the color in the Transaction Banking area? That was obviously a new business line that you guys created. Just how is it going? I saw the revenues were down slightly, I think, sequentially. But what’s going on in that line of business? And again, granted it’s not a major line of business for you folks at this time.
Denis Coleman: Sure. No. Thanks, Gerard. Our Transaction Banking activity remains a strategic focus. The revenues and the deposit balances are down slightly on a quarter-over-quarter basis. Those things are linked. We have grown our client count, and we remain committed to making the investments to grow high-quality balances and clients in that business over the medium to long term. No change in strategy.
Gerard Cassidy: Thank you.
Operator: Our next question comes from Saul Martinez with HSBC. The floor is yours.
Saul Martinez: Hi. Thanks for taking my question. I wanted to drill down a little bit more on Platform Solutions. I think, Denis, you mentioned that this quarter isn’t necessarily a great run rate for expenses or revenues. But even this quarter, if I adjust for the loan markdown and the impairment, it seems like you — my math is correct, you are PPNR positive. Obviously, credit costs are high, the credit card book is seasoning and you’re still growing that portfolio. But if you can just help us parse through some of the moving parts and help us understand the glide path to getting back to — or getting to close to breakeven or breakeven over the next, say, 24 months?
Denis Coleman: Sure. Thanks, Saul. So just a couple of things on glide path to help with the question in the context. So rate of growth is important in a business like this that’s been growing very, very quickly and obviously taking provisions in line with CECL. We expect the growth rate for that activity has been slowing and could slow further, and that has some positive impacts. And then as David mentioned, we made a strategic hire of a very seasoned industry professional. I mean, we’re working very, very closely with him on the overall operations of our platform. We remain in discussions with our card partners and working carefully to improve the overall efficiency for the platforms for our clients and for Goldman Sachs. I think it’s a combination of the way we’re going to grow on the forward combined with we manage the expense and the operating efficiency.
Saul Martinez: Okay, that’s helpful. And just maybe a quick follow-up there. I think you mentioned that NCOs, net charge-offs, were down this quarter. Is that — and you do have a 13.3 reserve coverage. It does seem like your maybe closer to a scenario where provisioning to come down quite a bit, especially under CECL. But just maybe just give us a sense of how you’re feeling about the credit outlook. And is my assessment right that your reserving could — especially if you slow down, it could come down pretty materially over the next year to two years?
Denis Coleman: So you have a couple of facts that are right. We did have a charge-off ratio that was down sequentially quarter-over-quarter from 5.8 to 5.1 and lower charge-offs. We are not necessarily predicting that’s the ongoing path for credit in the consumer portfolio. It’s something we’re still mindful of, given the environment, given the vintages in which we’ve originated those exposures. We do feel that the coverage ratio at 13.3 is appropriate, and we obviously set that based on our expected life of loan losses. So as we move forward, our expectation is we’ll continue to see elevated charge-offs. And as you look at our reporting on that with GreenSky pulled out of the consumer line, you’ll have a more pure look at the cards platform, and we do expect that will show elevated charge-offs.
Saul Martinez: Okay. Great. Thank you.
Operator: Our next question, we’ll return to Mike Mayo with Wells Fargo. Please go ahead.
Mike Mayo: Hi. Just a clarification on my prior question. So if I have this right, you reduced your PE investments by $3 billion quarter-over-quarter, and that allowed a $2.5 billion reduction in capital allocated to the Asset Management and Wealth segment. I mean, is that completely correlated. So if you get rid of the $21 billion of remaining principal investments, would that free up, say, $16 billion? Is that ballpark right?
Denis Coleman: No. Mike, I think when we started talking about the reduction of our historical principal investments over time, we gave a number of about $9 billion of capital release for the entire portfolio. So I don’t think — I’d be happy to get on with you and sort of work through your numbers, but I don’t think we have $16 billion incremental on the forward, significantly less than that.
Mike Mayo: So how much do you have left that once you discard the $21 billion that remains, how much capital should be freed up?
Denis Coleman: I mean, on a year-to-date basis, based on the activity that we’ve undertaken, that’s a release of about $2 billion, to give you a sense. So we probably have remaining mid-single digits.
Mike Mayo: Okay. And as far as the comp ratio, should we consider these onetime charges as part of comp or would that be excluded when we think about our models?
Denis Coleman: So we obviously have to include it for the purpose of the comp ratio accrual. We do think of them as more onetime in nature. We, as you know, did a headcount reduction earlier in this year. That’s not our current expectation to repeat that. If anything, we think that the work we’ve done to right-size the firm is something that puts us in a position to now make more selective investments in our headcount on the forward. So we don’t expect that type of severance to repeat itself. And we are taking into account as we set the compensation ratio, that severance payments is obviously not available to pay those employees that remain with the firm. We’re very focused on pertaining to continue to drive the franchise.
Operator: At this time, there are no further questions. Ladies and gentlemen, this concludes the Goldman Sachs Third Quarter 2023 Earnings Conference Call. Thank you for your participation. You may now disconnect.
