Su Dewei said that discussions on tariffs may have an impact on corporate sentiment and have a huge potential impact on corporate profits and losses.
The Zhitong Finance App learned that according to Goldman Sachs (GS.US) official Weiwei (GS.US) on April 28, Goldman Sachs Chairman and CEO David Solomon (David Solomon) reviewed the company's progress over the past year and introduced the newly established business lines and strategic priorities for 2025 in a letter to shareholders. Su Dewei said that the US remains the most important growth engine for the global economy, has the most dynamic and innovative global enterprises, and is supported by the most liquid capital market in the world. Meanwhile, although 2025 began with optimism, the environment is still complicated, and the final direction of US policies remains unclear. It is expected that many aspects will support growth, and there are also areas where the road ahead is difficult. In particular, discussions on tariffs may have an impact on corporate sentiment and have a huge potential impact on corporate profits and losses.
The full text of the shareholder letter is as follows:
Goldman Sachs Chairman and CEO Su Dewei sent a letter to shareholders
Dear shareholders,
In my previous letter, I mentioned that 2023 is Goldman Sachs's execution year, and we have made significant strategic progress, putting the company in a better position for future development. I'm happy to report that in 2024, we saw a return on our continued investment in our business and employees, which helped us deliver exceptional service to our customers and deliver impressive results for our shareholders.
In 2024, our net income increased 16% year over year to $53.5 billion; earnings per share increased 77% to $40.54; return on equity (ROE) increased by more than 500 basis points to 12.7%; efficiency increased 11.5 percentage points to 63.1%; and total shareholder return reached 52%.
Goldman Sachs has two world-class, complementary businesses: Global Banking & Markets (GBM), which includes leading investment banking, fixed income, foreign exchange, commodities and equities businesses; and Asset & Wealth Management (AWM). The latter is a leading global active asset management team with the top five alternative investments; business and excellent ultra-high net worth wealth management business. Both are well-positioned to continue to serve our customers and seize every opportunity for development.
In an ever-changing operating environment, we must continue to focus on helping our customers advance their strategic goals and address their most pressing challenges. At the Global Banking and Marketing Department, we provide clients with advice on transformational strategic transactions, provide financing channels to promote growth and innovation, and help them survive times of market fluctuations through risk management. Meanwhile, in the Asset and Wealth Management Department, clients continue to seek our advice and investment wisdom on wealth management, solutions, and alternative investments.
“Goldman Sachs has not been easy for the past five years since Investor Day 2020, but I'm proud of the progress we've made.”
Looking back at Goldman Sachs's five-year journey since Investor Day 2020, the journey hasn't been easy, but I'm proud of the progress we've made. We have met and even surpassed almost all of our original performance targets. Our investment and long-term vision of the business has enabled us to achieve double-digit returns across market cycles. Now that we're focused on preparing the company for the next five years, I'll continue to work hand in hand with Goldman Sachs's leadership team and all of my colleagues, and I'm excited for the work ahead.
Strengthen core business to promote company growth
Global Banking and Markets Department
In 2024, our Global Banking and Marketing Division will continue to provide clients with world-class advice and risk management services. In the investment banking sector, we have maintained our position as a leading M&A advisor, and have increased the participation of our fixed income, foreign exchange, commodities and stocks businesses in Goldman Sachs's top 150 client-related businesses over the past five years. At the same time, we have significantly increased our more durable net income from fixed income, foreign exchange, commodity finance, and equity financing—these two revenues have grown at a compound annual rate of 15% since 2019, setting a new record of $9.1 billion in 2024.
Our diverse businesses have achieved steady results over the past period. Over the past five years, the Global Banking and Marketing Department has generated an average net income of 33 billion dollars and an average return on equity of 16% in various market environments.
Comprehensive capital solutions business
Looking ahead, the emergence and growth of private credit and other private assets is one of the most important structural trends in the financial sector today, and we believe Goldman Sachs is in a critical position in this trend. We strongly believe that no other financial institution can simultaneously have an advisory network covering more than 10,000 companies worldwide, the same strong public and private issuance capabilities in fixed income and stocks, and an investment platform that can attract and invest in various liquid and alternative asset classes like Goldman Sachs.
In order to take advantage of these advantages and seize the opportunities brought by these megatrends, and on top of the growing synergy between global banks, marketing departments and asset and wealth management clients, we established a comprehensive capital solutions business line in 2025 to provide customers with a more comprehensive set of services spanning financing, initiation, structuring and risk management solutions.
The culmination of these business capabilities allows us to better serve our customers as these private markets continue to grow. Combining excellent corporate business with a globally scaled investment platform allows us to identify the most attractive private credit, private equity and other asset opportunities for our clients.
Although the Integrated Capital Solutions business is part of the Global Banking and Marketing Department, the ability to find these private asset opportunities provides our banking clients with significant capital and unique investment opportunities for our asset management and private wealth management clients. This is just one example of how the “One Goldman Sachs” philosophy continues to drive our business development.
Asset and Wealth Management Department
In 2024, the Department of Asset and Wealth Management will continue to provide investment and advisory services to the world's leading institutions, financial advisors and individuals. Our regulatory assets reached a new high, reflecting our 28th consecutive quarter of net inflow of long-term operating expenses. In terms of wealth management, our clients' total assets increased to approximately $1.6 trillion (8).
We've also consolidated more sustainable revenue streams. In 2024, we surpassed our original target of over $10 billion in annual management fees and other expenses. Management fees and other expenses and net income from private banks and loans have grown at a compound annual rate of 12% since 2019, and we continue to expect high single-digit growth over the next few years.
Furthermore, in 2024, we also significantly increased the pre-tax profit margin of the Asset and Wealth Management Department, achieved our mid-term pre-tax profit margin target (around 25% range), and are committed to continuously achieving returns in the 15% range.
In terms of alternative investments, we are expanding our flagship fund program and developing new strategies. We remain focused on developing institutional clients and expanding our wealth management participation channels. We raised more than $70 billion in alternative investments in 2024, and we expect the 2025 fundraising will be in line with recent years.
Run your company more efficiently
When market conditions improve, it's easy for institutions to overlook the importance of discipline and running their business in a more effective way. In 2024, we launched a three-year program to optimize our organizational footprint, better manage our non-payroll expenses, and increase productivity through automation including the use of artificial intelligence solutions.
Today, many of our employees can use generative AI-driven tools to help them be more efficient and productive. These tools include programming assistants to assist engineers, Goldman Sachs's natural language GS AI assistants, and other use cases we've developed in our main business.
In 2025, we plan to continue increasing the use of these tools in our daily workflows. These efficiencies will allow us to invest further in achieving growth and improving the customer experience over time.
Investing in Goldman Sachs employees and culture
We'll also continue to invest in Goldman Sachs's most important asset: our people.
We know our collaborative culture attracts great talent. Many Goldman Sachs employees have long careers with the company — more than 40% of partners joined Goldman Sachs through campus recruitment. Even former employees who left Goldman Sachs to pursue other development opportunities often become important customers for us. Goldman Sachs has more than 270 former employees in top management positions in companies with a market capitalization of more than $1 billion or regulatory assets of more than 5 billion dollars. Additionally, in 2024, approximately 380 former Goldman Sachs employees returned to the company, including around 25 partners and managing directors. In February of this year, we held our annual partner meeting in Miami, USA, and welcomed 95 new partners. I saw firsthand the strength of Goldman Sachs culture and am proud of the diverse composition of partners in 2024.
At the same time, we are focusing on aligning our leadership team to reflect the company's operating structure and growth. In January of this year, we announced adjustments to the Global Banking and Markets Division's customer coverage leadership for investment banking, fixed income, foreign exchange, commodities, and equities. We've also added 18 new members to Goldman Sachs's Global Management Committee.
When reviewing the leadership structure, we wanted to meet three needs: 1) create more operational leverage for senior executives; 2) give employees more responsibility and growth opportunities; and 3) ensure that Goldman Sachs has a strong leadership team that has stood the test of time. Every executive brings a wealth of experience and deep expertise to their leadership positions, and I look forward to working with them to move Goldman Sachs forward.
“We are now focused on preparing the company for the next five years.”
Looking to the future: a rapidly changing environment
Financial market participants continue to recognize the competitiveness of the US economy and the opportunities for continued growth. But as we have seen in recent weeks, the general environment is unpredictable, and global growth is affected by inflation, tariff escalation, and geographical relationships and long-standing conflicts in multiple regions.
Europe continues to lag behind the US in growth. As we spoke with the region's leaders, we heard a call to unleash energy, the power to innovate, and a renewed sense of urgency. I hope that European leaders will receive public support and political will to carry out the necessary structural reforms to promote growth.
Over the past year, as I spoke to other CEOs, almost everyone felt the impact of regulation on their business. However, after the US election results were announced last year, the CEOs' mood and outlook changed, and this is particularly prominent in the US. In light of anticipated changes in the regulatory environment, there has been an increase in willingness to trade, which is likely to stimulate more capital market activity in 2025. The US remains the most important growth engine for the global economy, has the most dynamic and innovative global companies, and is supported by the most liquid capital markets in the world. Meanwhile, although 2025 began with optimism, the environment is still complicated, and the final direction of US policies remains unclear. I expect many aspects to support growth, and there are also areas where the road ahead is difficult. In particular, discussions on tariffs may have an impact on business sentiment and have a huge potential impact on corporate profits and losses.
More broadly, the new US administration has begun a series of activities that have a wide range of potential policy consequences. While policy uncertainty within the first few months of any government is to be expected, it is important that policy positions need to be made more clear before companies can make the decisions needed for long-term planning and investment. Many CEOs I've met have been evaluating the impact of many uncertainties, and I've also seen some corporate clients act more cautious before gaining more clarity.
Regardless of the future, I am confident about Goldman Sachs's future prospects. Adhering to our core values of “customer first, cooperative spirit, honesty, and pursuit of excellence”, we are ready to continue to serve our customers and bring stronger returns to our shareholders.
Chairman and Chief Executive Officer
David Solomon (Su)
