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Fundamental View
AS OF 29 Dec 2025Goldman Sachs’ performance and market share in its core legacy businesses of investment banking and sales and trading have remained very solid, working through soft periods associated with rising rates; with market conditions improving into 2025 these businesses should continue to excel.
With costs related to the exit from consumer businesses in the rear-view, recent results have reflected Goldman’s positioning for re-heating capital markets. Wealth and Asset Management is another likely area of growth in the coming years, where Goldman can leverage its strengths in HNW and alternative asset management as well as growth initiatives.
Business Description
AS OF 29 Dec 2025- Goldman Sachs is now the fifth largest bank holding company in the U.S. with approximately $1.81 tn in assets as of 3Q25 and a market capitalization of $242.8 bn as of November 24th, 2025.
- Goldman Sachs presents its activities through three business segments: Global Banking & Markets, Asset & Wealth Management, and Platform Solutions.
- Goldman's core strengths include equity and FICC sales & trading, investment banking, institutional investment management including alternatives, and high net worth wealth management. It has been expanding its wealth management client base, and adding other stable fee income sources which help diversify its revenue streams.
Risk & Catalysts
AS OF 29 Dec 2025The early 2020’s were a mixed bag– the foray into consumer lending was costly and ultimately was reversed, diverting capital and management attention and providing a meaningful drag on profitability. Goldman has re-focused on its core businesses to much recent success, though its profile will remain less diversified than large GSIB peers.
Goldman could participate in further M&A to achieve its long-term strategic goals, and recent deals have been add-on deals related to asset/wealth management.
Goldman could be impacted by various risks during periods of market turmoil, but for the most part, has been positively impacted by bouts of volatility which tend to spur more client trading activity– 2025 tariff risks being a recent example. Goldman is subject to significant market and counterparty risks as reflected in the DFAST/SCB regime.
Key Metric
AS OF 29 Dec 2025| $ mn | FY21 | FY22 | FY23 | FY24 | 3Q25 |
|---|---|---|---|---|---|
| ROAE (annual) | 21.3% | 9.7% | 7.3% | 12.0% | 13.6% |
| ROAA (annual) | 1.5% | 0.7% | 0.5% | 0.8% | 0.9% |
| PPNR / Avg. Assets | 1.86% | 1.08% | 3.29% | 3.92% | 1.25% |
| Efficiency Ratio | 54% | 65% | 282% | 266% | 61% |
| Net charge-offs (LTM) / Loans | 0.19% | 0.30% | 0.68% | 0.61% | 0.53% |
| Common Dividend Payout | 10.6% | 28.4% | 158.9% | 129.4% | 24.9% |
| CET1 Ratio | 13.6% | 15.0% | 14.4% | 15.0% | 14.3% |
| Supplementary Leverage Ratio (SLR) | 5.5% | 5.8% | 5.5% | 5.5% | 5.2% |
| Liquidity Coverage Ratio (LCR) | 122% | 129% | 128% | 126% | 128% |
CreditSight View Comment
AS OF 13 Jan 2026We are moving Goldman Sachs to Underperform from Market perform on valuation, seeing Bank of America as a better option at recent spread levels. We also see Goldman Sachs as among the least likely to reduce debt supply in light of lower debt requirements– Goldman’s issuance needs are far more determined by wholesale funding needs for the trading business than managing to regulatory requirements, particularly in active capital markets conditions as we have been in recently. We have no particular fundamental concerns and in fact expect Goldman to continue to benefit from the momentum in the dealmaking environment and secular growth in trading.
Recommendation Reviewed: January 13, 2026
Recommendation Changed: January 13, 2026
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