GS Goldman Sachs Group Inc - 10-K
0000886982-26-000091Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is -0.01pp more bearish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase- conflicting+3
- adversely+2
- unavailability+2
- violations+1
- shutdowns+1
- innovator+1
Risk Factors (Item 1A)
21,338 words
Item 1A. Risk Factors
We face a variety of risks that are substantial and inherent in our businesses.
The following is a summary of some of the more important factors that could affect our businesses:
Market
• Our businesses have been and may in the future be adversely affected by conditions in the global financial markets and broader economic conditions.
• Our businesses have been and may in the future be adversely affected by declining asset values, particularly where we have net “long” positions, receive fees based on the value of assets managed, or receive or post collateral.
• Our market-making activities have been and may in the future be affected by changes in the levels of market volatility.
• Our investment banking, client intermediation, asset management and wealth management businesses have in the past been adversely affected and may in the future be adversely affected by market uncertainty or lack of confidence among investors and CEOs due to declines in economic activity and other unfavorable economic, geopolitical or market conditions.
• Our asset management and wealth management businesses have been and may in the future be adversely affected by the poor investment performance of our investment products or a client preference for products other than those which we offer or for products that generate lower fees.
• Inflation has had and could in the future have a negative effect on our business, results of operations and financial condition.
Liquidity
• Our liquidity, profitability and businesses may be adversely affected by an inability to access the debt capital markets or to sell assets.
• Our businesses have been and may in the future be adversely affected by disruptions or lack of liquidity in the credit markets, including reduced access to credit and higher costs of obtaining credit.
• Reductions in our credit ratings or an increase in our credit spreads may adversely affect our liquidity and cost of funding.
• Group Inc. is a holding company and its liquidity depends on payments and loans from its subsidiaries, many of which are subject to legal, regulatory and other restrictions on providing funds or assets to Group Inc.
Credit
• Our businesses, profitability and liquidity may be adversely affected by deterioration in the credit quality of or defaults by third parties.
• Concentration of risk increases the potential for significant losses in our market-making, underwriting, investing and financing activities.
• Derivative transactions and delayed documentation or settlements expose us to credit risk, unexpected risks and potential losses.
Operational
• A failure in our or third-party operational systems or human error, malfeasance or other misconduct, could impair our liquidity, disrupt our businesses, result in the disclosure of confidential information, damage our reputation and cause losses.
• A failure or disruption in our infrastructure, or in the operational systems or infrastructure of third parties, could impair our liquidity, disrupt our businesses, damage our reputation and cause losses.
• The development and use of AI present risks and challenges that may adversely impact our business.
• A failure to protect our computer systems, networks and information, and our clients’ information, against cyber attacks and similar threats could impair our ability to conduct our businesses, result in the disclosure, theft or destruction of confidential information, damage our reputation and cause losses.
• We have in the past incurred and may in the future incur losses as a result of ineffective risk management processes and strategies.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Legal and Regulatory
• Our businesses and those of our clients are subject to extensive and pervasive regulation around the world.
• A failure to appropriately identify and address potential conflicts of interest has in the past adversely affected and may in the future adversely affect our businesses.
• We may be adversely affected by governmental and regulatory scrutiny or negative publicity.
• Substantial civil or criminal liability or significant regulatory action against us has in the past had and may in the future have material adverse financial effects and significant reputational consequences, which in turn could seriously harm our business prospects.
• In conducting our businesses around the world, we are subject to political, legal, regulatory, tax and other risks that are inherent in operating in many countries.
• The application of regulatory strategies and requirements in the U.S. and in non-U.S. jurisdictions to facilitate the orderly resolution of large financial institutions could create greater risk of loss for Group Inc.’s security holders.
• The application of Group Inc.’s proposed resolution strategy could result in greater losses for Group Inc.’s security holders.
• Our commodities activities, particularly our physical commodities activities, subject us to extensive regulation and involve certain potential risks, including environmental, reputational and other risks that may expose us to significant liabilities and costs.
Competition
• Our results have been and may in the future be adversely affected by the composition of our client base.
• The financial services industry is highly competitive.
• The growth of electronic trading and the introduction of new products and technologies, including trading and distributed ledger technologies, such as cryptocurrencies, and AI technologies, has increased competition.
• Our businesses would be adversely affected if we are unable to hire and retain qualified employees.
Market Developments and General Business Environment
• Our businesses, financial condition, liquidity and results of operations have been and may in the future be adversely affected by unforeseen or catastrophic events, including pandemics, terrorist attacks, wars, extreme weather events or other natural disasters.
• Climate-related physical and transition risks could disrupt our businesses and adversely affect client activity levels and the creditworthiness of our clients and counterparties, and we are at increased risk of being subject to conflicting legal and regulatory requirements and stakeholder expectations regarding climate-related matters.
• Our business, financial condition, liquidity and results of operations have been adversely affected by disruptions in the global economy caused by conflicts, and related sanctions and other developments.
• Certain of our businesses and our funding instruments may be adversely affected by changes in reference rates, currencies, indexes, baskets or ETFs to which products we offer or funding that we raise are linked.
• Our business, financial condition, liquidity and results of operations may be adversely affected by disruptions in the global economy caused by escalating tensions between the U.S. and China.
• We face enhanced risks as we operate in new locations and transact with a broader array of clients and counterparties.
• We may not be able to fully realize the expected benefits or synergies from acquisitions, joint ventures or other business initiatives in the time frames we expect, or at all.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
The following are detailed descriptions of our Risk Factors summarized above:
Market
Our businesses have been and may in the future be adversely affected by conditions in the global financial markets and broader economic conditions.
Many of our businesses, by their nature, do not produce predictable earnings, and all of our businesses are materially affected by conditions in the global financial markets and economic conditions generally, both directly and through their impact on client activity levels and creditworthiness. These conditions can change suddenly and negatively.
Our financial performance is highly dependent on the environment in which our businesses operate. A favorable business environment is generally characterized by, among other factors, high global gross domestic product growth, regulatory and market conditions that result in transparent, liquid and efficient capital markets, low inflation, business, consumer and investor confidence, stable geopolitical conditions and strong business earnings.
Unfavorable or uncertain economic and market conditions can be caused by: low levels of or declines in economic growth, business activity or investor, business or consumer confidence; concerns over a potential recession; changes in consumer spending or borrowing patterns; pandemics; limitations on the availability or increases in the cost of credit and capital; illiquid markets; increases in inflation or interest rates; exchange rate or basic commodity price volatility; increasing or high default rates; high levels of inflation or stagflation; concerns about U.S. and other sovereign defaults; uncertainty concerning fiscal or monetary policy, government shutdowns, debt ceilings or funding; the extent of and uncertainty about potential changes in tax rates and regulatory changes; limitations on international trade and travel; changes in immigration policies; laws and regulations that limit trading in, or the issuance of, securities of issuers outside their domestic markets; political instability or violence; outbreaks or worsening of domestic or international tensions or hostilities, terrorism, nuclear proliferation, cybersecurity threats or attacks and other forms of disruption to or curtailment of global communication, energy transmission or transportation networks or other geopolitical instability or uncertainty; corporate, political or other scandals that reduce investor confidence in capital markets; extreme weather events or other natural disasters; or a combination of these or other factors.
The financial services industry and the securities and other financial markets have been materially and adversely affected in the past by significant declines in the values of nearly all asset classes, by a severe lack of liquidity and by high levels of borrower defaults. In addition, concerns about actual or potential increases in interest rates, inflation and other borrowing costs, a public health emergency, sovereign debt risk and its impact on the relevant sovereign banking system, and limitations on international trade, have, at times, negatively impacted the levels of client activity.
General uncertainty about economic, political and market activities, and the scope, timing and impact of regulatory reform, as well as weak consumer, investor and CEO confidence resulting in large part from such uncertainty, has in the past negatively impacted client activity, which has in the past adversely affected and could in the future adversely affect many of our businesses. The outcomes of political elections could also result in changes in policy, which could have adverse effects on us or the business environment in which we operate more generally. Periods of low volatility and periods of high volatility combined with a lack of liquidity have at times had an unfavorable impact on our market-making businesses.
Changes, or proposed changes, to U.S. international trade and investment policies, particularly with important trading partners, have in recent years negatively impacted financial markets. Continued or escalating tensions may result in further actions taken by the U.S. or other countries that could disrupt international trade and investment and adversely affect financial markets. Those actions could include, among others, the implementation of or increase in sanctions, tariffs or foreign exchange measures, the large-scale sale of U.S. Treasury securities or other restrictions on cross-border trade, investment, or transfer of information or technology. For example, in April 2025, the U.S. announced broad tariffs on imports from China and other U.S. trading partners, and China subsequently announced changes in trade practices, including with respect to the export of rare earth minerals. Such developments have in the past affected and could in the future adversely affect our or our clients’ businesses.
Financial institution returns may be negatively impacted by increased funding costs due in part to the lack of perceived government support of such institutions in the event of future financial crises relative to financial institutions in countries in which governmental support is maintained. In addition, liquidity in the financial markets has in the past been and could in the future be negatively impacted as market participants and market practices and structures adjust to evolving regulatory frameworks.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
The U.S. federal government has in the past reached and may in the future reach the statutory limit of its outstanding debt. In that situation, if Congress does not raise or suspend the debt ceiling, the U.S. could default on its obligations, including Treasury securities that play an integral role in financial markets. A default by the U.S. could result in unprecedented market volatility and illiquidity, heightened operational risks relating to the clearance and settlement of transactions, margin and other disputes with clients and counterparties, an adverse impact to investors including money market funds that invest in U.S. Treasuries, downgrades in the U.S. credit rating, further increases in interest rates and borrowing costs and a recession in the U.S. or other economies. Continued uncertainty relating to the debt ceiling could result in downgrades of the U.S. credit rating, which could adversely affect market conditions, lead to margin disputes, increases in interest rates and borrowing costs and necessitate significant operational changes among market participants, including us. A downgrade of the U.S. federal government’s credit rating could also materially and adversely affect the market for repurchase agreements, securities borrowing and lending, and other financings typically collateralized by U.S. Treasury or agency obligations. Further, the fair value, liquidity and credit ratings of securities issued by, or other obligations of, agencies of the U.S. government or related to the U.S. government or its agencies, as well as municipal bonds could be similarly adversely affected. An increasing frequency of government shutdowns, or near shutdowns, in the U.S. could also lead to uncertainty as to the continued funding of the U.S. government, which could, in turn, adversely affect the credit ratings of the U.S. and the market for U.S. Treasury or agency obligations, and shutdowns could adversely affect our underwriting business.
Our businesses have been and may in the future be adversely affected by declining asset values, particularly where we have net “long” positions, receive fees based on the value of assets managed, or receive or post collateral.
Many of our businesses have net “long” positions in debt securities, loans, derivatives, mortgages, equities (including private equity and real estate) and most other asset classes. These include positions we take when we act as a principal to facilitate our clients’ activities, including our exchange-based market-making activities, or commit large amounts of capital to maintain positions in interest rate and credit products, as well as through our currencies, commodities, equities and mortgage-related activities. In addition, we invest in similar asset classes. Substantially all of our investing and market-making positions and a portion of our loans are marked-to-market on a daily or other periodic basis and declines in asset values directly and promptly impact our earnings, unless we have effectively “hedged” our exposures to those declines.
In certain circumstances, it may not be possible or economic to hedge our exposures and, to the extent that we do so, the hedge may be ineffective or may greatly reduce our ability to profit from increases in the values of the assets. This is particularly the case for credit products, including leveraged loans, private credit, and private equities or other securities that are not freely tradable or lack established and liquid trading markets. Sudden declines and significant volatility in the prices of assets have in the past substantially curtailed or eliminated and may in the future substantially curtail or eliminate the trading markets for certain assets, which may make it difficult to sell, hedge or value such assets. We may incur losses from time to time as trading markets deteriorate or cease to function, including with respect to loan commitments we have made or securities offerings we have underwritten. The inability to sell or effectively hedge assets reduces our ability to limit losses in such positions and the difficulty in valuing assets has in the past negatively affected and may in the future negatively affect our capital, liquidity or leverage ratios, our funding costs and our ability to deploy capital.
In our exchange-based market-making activities, we are obligated by stock exchange rules to maintain an orderly market, including by purchasing securities in a declining market. In markets where asset values are declining and in volatile markets, this results in losses and an increased need for liquidity.
We receive asset-based management fees based on the value of our clients’ portfolios or investment in funds managed by us and, in some cases, we also receive incentive fees based on increases in the value of such investments. Declines in asset values would ordinarily reduce the value of our clients’ portfolios or fund assets, which in turn would typically reduce the fees we earn for managing such assets.
We post collateral to support our obligations and receive collateral that supports the obligations of our clients and counterparties. When the value of the assets posted as collateral or the credit ratings of the party posting collateral decline, the party posting the collateral may need to provide additional collateral or, if possible, reduce its trading position. An example of such a situation is a “margin call” in connection with a brokerage account. Therefore, declines in the value of asset classes used as collateral mean that either the cost of funding positions is increased or the size of positions is decreased or both. If we are the party providing collateral, this can increase our costs and reduce our profitability and if we are the party receiving collateral, this can also increase our risk and/or reduce our profitability by reducing the level of business done with our clients and counterparties.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
In addition, volatile or less liquid markets increase the difficulty of valuing assets, which can lead to costly and time-consuming disputes over asset values and the level of required collateral, as well as increased credit risk to the recipient of the collateral due to delays in receiving adequate collateral. In cases where we foreclose on collateral, sudden declines in the value or liquidity of the collateral have in the past resulted in and may in the future result in significant losses to us, especially where there is a single type of collateral supporting the obligation. In addition, we have been and may in the future be subject to claims that the foreclosure was not permitted under the legal documents, was conducted in an improper manner, including in violation of law, or caused a client or counterparty to incur significant losses or go out of business.
Our market-making activities have been and may in the future be affected by changes in the levels of market volatility.
Certain of our market-making activities depend on market volatility to provide trading and arbitrage opportunities to our clients, and decreases in volatility have reduced and may in the future reduce these opportunities and the level of client activity associated with them and have adversely affected and may in the future adversely affect the results of these activities. While increased volatility can increase trading volumes and spreads, it also increases risk as measured by Value-at-Risk (VaR) and increases risks in connection with our market-making activities and can cause us to reduce our inventory. Limiting the size of our market-making positions can adversely affect our profitability. In periods when volatility is increasing, but asset values are declining significantly, it may not be possible to sell assets at all or it may only be possible to do so at steep discounts. In those circumstances, we have been and may in the future be forced to either take on additional risk or to realize losses in order to decrease our VaR. In addition, increases in volatility increase the level of our RWAs, which increases the amount of capital that we are required to hold, and this can reduce our profitability and reduce our ability to distribute capital to our shareholders. For example, in August 2024, market volatility increased significantly, which adversely affected activity levels, increased our market RWAs and adversely impacted our results on some days.
Our investment banking, client intermediation, asset management and wealth management businesses have in the past been adversely affected and may in the future be adversely affected by market uncertainty or lack of confidence among investors and CEOs due to declines in economic activity and other unfavorable economic, geopolitical or market conditions.
Our investment banking business has in the past been and may in the future be adversely affected by market conditions. Poor economic conditions and other uncertain geopolitical conditions may adversely affect and have in the past adversely affected investor and CEO confidence, resulting in significant industry-wide declines in the size and number of underwritings and of advisory transactions, which would likely have and have in the past had an adverse effect on our revenues and our profit margins. In particular, because a significant portion of our investment banking revenues is derived from our participation in large transactions, a decline in the number of large transactions has in the past and would in the future adversely affect our investment banking business. Similarly, in recent years, cross-border initial public offerings and other securities offerings have accounted for a significant proportion of new issuance activity. Legislative, regulatory or other changes that limit trading in, or the issuance of, securities outside the issuers’ domestic markets, that result in or could result in the delisting or removal of securities from exchanges or indices, have in the past adversely affected and would in the future adversely affect our underwriting and client intermediation businesses. Furthermore, changes, or proposed changes, to international trade and investment policies of the U.S. and other countries could negatively affect market activity levels and our revenues.
In certain circumstances, market uncertainty or general declines in market or economic activity may adversely affect our client intermediation businesses by decreasing levels of overall activity or by decreasing volatility.
Market uncertainty, volatility and adverse economic conditions, as well as declines in asset values, may cause our clients to transfer their assets out of our funds or other products or their brokerage accounts and result in reduced net revenues, principally in our asset management and wealth management businesses. Even if clients do not withdraw their funds, they may invest them in products that generate less fee income.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Our asset management and wealth management businesses have been and may in the future be adversely affected by the poor investment performance of our investment products or a client preference for products other than those which we offer or for products that generate lower fees.
Poor investment returns in our asset management and wealth management businesses, due to either general market conditions or underperformance (relative to our competitors or to benchmarks) by funds or accounts that we manage or investment products that we design or sell, affect our ability to retain existing assets and to attract new clients or additional assets from existing clients. This could affect the management and incentive fees that we earn on AUS or the commissions and net spreads that we earn for selling other investment products. To the extent that our clients choose to invest in products that we do not currently offer, we will suffer outflows and a loss of management fees. Further, if, due to changes in investor sentiment or the relative performance of certain asset classes or otherwise, clients continue to invest in products that generate lower fees (e.g., passively managed or fixed income products), our average effective management fee will decline further and our asset management and wealth management businesses could be adversely affected.
Inflation has had and could in the future have a negative effect on our business, results of operations and financial condition.
Inflationary pressures in recent years have affected economies, financial markets and market participants worldwide. Inflationary pressures in recent years have increased certain of our operating expenses, and have adversely affected consumer sentiment and CEO confidence. Central bank responses to inflationary pressures in recent years have also resulted in higher market interest rates relative to earlier years, which, in turn, have at times contributed to lower activity levels across financial markets, in particular for debt underwriting transactions and mortgage originations, and in some cases resulted in lower values for certain financial assets which have adversely affected our equity and debt investments. Higher interest rates increase our borrowing costs and rising interest rates have in recent years required us to increase interest paid on our deposits. If inflationary pressures increase, our expenses may increase; we may be unable to achieve our efficiency ratio target; activity levels for certain of our businesses, in particular debt underwriting and mortgages, may decline; our interest expense could increase faster than our interest income, reducing our net interest income and net interest margin; certain of our investments could incur losses or generally low levels of returns; AUS could decline, or the composition of our AUS could shift to lower fee products, reducing management and other fees; economies worldwide could experience recessions; and we could operate in a generally unfavorable economic and market environment.
Liquidity
Our liquidity, profitability and businesses may be adversely affected by an inability to access the debt capital markets or to sell assets.
Liquidity is essential to our businesses. It is of critical importance to us, as most of the failures of financial institutions have occurred in large part due to insufficient liquidity. Our liquidity may be impaired by an inability to access secured and/or unsecured debt markets, an inability to raise or retain deposits, an inability to access funds from our subsidiaries or otherwise allocate liquidity optimally, an inability to sell assets or redeem our investments, lack of timely settlement of transactions, unusual deposit outflows, or other unforeseen outflows of cash or collateral. This situation may arise due to circumstances that we may be unable to control, such as a general market or economic disruption or an operational problem that affects third parties or us, or even by the perception among market participants that we, or other market participants, are experiencing greater liquidity risk.
We employ structured products to benefit our clients and hedge our own risks. The financial instruments that we hold and the contracts to which we are a party are often complex, and these complex structured products often do not have readily available markets to access in times of liquidity stress. Our investing and financing activities may lead to situations where the holdings from these activities represent a significant portion of specific markets, which could restrict liquidity for our positions.
Further, our ability to sell assets may be impaired if there is not generally a liquid market for such assets, as well as in circumstances where other market participants are seeking to sell similar otherwise generally liquid assets at the same time, as is likely to occur in a liquidity or other market crisis or in response to changes to rules or regulations. In addition, clearinghouses, exchanges and other financial institutions with which we interact may exercise set-off rights or the right to require additional collateral, including in difficult market conditions, which could further impair our liquidity.
Numerous regulations impose stringent liquidity requirements on large financial institutions, including us. These regulations require us to hold large amounts of highly liquid assets and reduce our flexibility to source and deploy funding.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Our businesses have been and may in the future be adversely affected by disruptions or lack of liquidity in the credit markets, including reduced access to credit and higher costs of obtaining credit.
Widening credit spreads, as well as significant declines in the availability of credit, have in the past adversely affected our ability to borrow on a secured and unsecured basis and may do so in the future. We fund ourselves on an unsecured basis by primarily issuing long-term debt and commercial paper, by raising deposits at our bank subsidiaries, by issuing structured debt and by obtaining loans or lines of credit from commercial or other banking entities. We seek to finance many of our assets on a secured basis. Any disruptions in the credit markets may make it harder and more expensive to obtain funding for our businesses. If our available funding is limited or we are forced to fund our operations at a higher cost, these conditions may require us to curtail our business activities and increase our cost of funding, both of which could reduce our profitability, particularly in our businesses that involve investing, lending and market making.
Our clients engaging in mergers, acquisitions and other types of strategic transactions often rely on access to the secured and unsecured credit markets to finance their transactions. A lack of available credit or an increased cost of credit can adversely affect the size, volume and timing of our clients’ mergers and acquisitions transactions, particularly large transactions, and adversely affect our advisory and underwriting businesses.
Our credit businesses have been and may in the future be negatively affected by a lack of liquidity in credit markets. A lack of liquidity reduces price transparency, increases price volatility and decreases transaction volumes and size, all of which can increase transaction risk or decrease the profitability of these businesses.
Reductions in our credit ratings or an increase in our credit spreads may adversely affect our liquidity and cost of funding.
Our credit ratings are important to our liquidity. A reduction in our credit ratings could adversely affect our liquidity and competitive position, increase our borrowing costs, limit our access to the capital markets or trigger our obligations under certain provisions in some of our trading and collateralized financing contracts. Under these provisions, counterparties could be permitted to terminate contracts with us or require us to post additional collateral. Termination of our trading and collateralized financing contracts could cause us to sustain losses and impair our liquidity by requiring us to find other sources of financing or to make significant cash payments or securities movements.
As of December 2025, our counterparties could have called for additional collateral or termination payments related to our net derivative liabilities under bilateral agreements in an aggregate amount of $224 million in the event of a one-notch downgrade of our credit ratings and $1.80 billion in the event of a two-notch downgrade of our credit ratings. A downgrade by any one rating agency, depending on the agency’s relative ratings of us at the time of the downgrade, may have an impact which is comparable to the impact of a downgrade by all rating agencies. For further information about our credit ratings, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Liquidity Risk Management — Credit Ratings” in Part II, Item 7 of this Form 10-K.
Our cost of obtaining long-term unsecured funding is directly related to our credit spreads (the amount in excess of the interest rate of benchmark securities that we need to pay). Increases in our credit spreads can significantly increase our cost of this funding. Changes in credit spreads are market-driven, and subject at times to unpredictable and highly volatile movements. Our credit spreads are also influenced by market perceptions of our creditworthiness and movements in the costs to purchasers of credit default swaps referenced to our long-term debt. The market for credit default swaps has proven to be extremely volatile and at times has lacked a high degree of transparency or liquidity.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Group Inc. is a holding company and its liquidity depends on payments and loans from its subsidiaries, many of which are subject to legal, regulatory and other restrictions on providing funds or assets to Group Inc.
Group Inc. is a holding company and, therefore, depends on dividends, distributions, loans and other payments from its subsidiaries to fund share repurchases and dividend payments and to fund payments on its obligations, including debt obligations. Many of our subsidiaries, including our broker-dealer and bank subsidiaries, are subject to laws that restrict dividend payments or authorize regulatory bodies to block or reduce the flow of funds from those subsidiaries to Group Inc.
In addition, our broker-dealer and bank entities and their subsidiaries are subject to restrictions on their ability to lend or transact with affiliates and to minimum regulatory capital and other requirements, as well as restrictions on their ability to use funds deposited with them in brokerage or bank accounts to fund their businesses. Additional restrictions on related-party transactions, increased capital and liquidity requirements and additional limitations on the use of funds on deposit in bank or brokerage accounts, as well as lower earnings, can reduce the amount of funds available to meet the obligations of Group Inc., including under the FRB’s source of strength requirement, and even require Group Inc. to provide additional funding to such subsidiaries. Restrictions or regulatory action of that kind could impede access to funds that Group Inc. needs to make payments on its obligations, including debt obligations, or dividend payments. In addition, Group Inc.’s right to participate in a distribution of assets upon a subsidiary’s liquidation or reorganization is subject to the prior claims of the subsidiary’s creditors.
There has been significant regulation and supervision of our branches and subsidiaries by the governments and regulators in the countries in which those branches and subsidiaries are located or do business. Concerns about protecting clients and creditors of branches and subsidiaries of financial institutions that are located outside of the country in which such branches or subsidiaries are located or do business have caused or may cause a number of governments and regulators to take additional steps to “ring fence” or require internal total loss-absorbing capacity (which may also be subject to “bail-in” powers, as described below) at those branches and subsidiaries in order to protect clients and creditors of those branches and subsidiaries in the event of financial difficulties involving those branches and subsidiaries. The result has been and may continue to be additional limitations on our ability to efficiently move capital and liquidity among our affiliated entities, or to Group Inc., including in times of stress, thereby increasing the overall level of capital and liquidity required by us on a consolidated basis.
Furthermore, Group Inc. has guaranteed the payment obligations of certain of its subsidiaries, including GS&Co. and GS Bank USA, subject to certain exceptions. In addition, Group Inc. guarantees many of the obligations of other of its consolidated subsidiaries on a transaction-by-transaction basis, as negotiated with counterparties. These guarantees may require Group Inc. to provide substantial funds or assets to its subsidiaries or their creditors or counterparties at a time when Group Inc. is in need of liquidity to fund its own obligations.
The requirements for us and certain of our subsidiaries to develop and submit recovery and resolution plans to regulators, and the incorporation of feedback received from regulators, may require us to increase capital or liquidity levels or issue additional long-term debt at Group Inc. or particular subsidiaries or otherwise incur additional or duplicative operational or other costs at multiple entities, and may reduce our ability to provide Group Inc. guarantees of the obligations of our subsidiaries or raise debt at Group Inc. Resolution planning may also impair our ability to structure our intercompany and external activities in a manner that we may otherwise deem most operationally efficient. Furthermore, arrangements to facilitate our resolution planning may cause us to be subject to additional taxes. Any such limitations or requirements would be in addition to the legal and regulatory restrictions described above on our ability to engage in capital actions or make intercompany dividends or payments.
See “Business — Regulation” in Part I, Item 1 of this Form 10-K for further information about regulatory restrictions.
Credit
Our businesses, profitability and liquidity may be adversely affected by deterioration in the credit quality of or defaults by third parties.
We are exposed to the risk that third parties that owe us money, securities or other assets will not perform their obligations. These parties may default on their obligations to us due to bankruptcy, lack of liquidity, operational failure or other reasons. A failure of a significant market participant, or even concerns about a default by such an institution, has in the past led and could in the future lead to significant liquidity problems, losses or defaults by other institutions, which in turn could adversely affect us. We are also exposed to the risk of a special assessment, including under the FDIA or OLA in the event of the failure of a bank or non-bank financial institution, which has in the past adversely affected and may in the future adversely affect our results of operations.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
We are also subject to the risk that our rights against third parties may not be enforceable in all circumstances. In addition, deterioration in the credit quality of third parties whose securities or obligations we hold, including a deterioration in the value of collateral posted by third parties to secure their obligations to us, including under derivative contracts and loan agreements, could result in losses and/or adversely affect our ability to rehypothecate or otherwise use those securities or obligations for liquidity purposes.
A significant downgrade in the credit ratings of our counterparties could also have a negative impact on our results. While in many cases we are permitted to require additional collateral from counterparties that experience financial difficulty, disputes may arise as to the amount of collateral we are entitled to receive and the value of pledged assets. The termination of contracts and the foreclosure on collateral may subject us to claims for the improper exercise of our rights. Default rates, downgrades and disputes with counterparties as to the valuation of collateral typically increase significantly in times of market stress, increased volatility and illiquidity.
As part of our clearing and prime financing activities, we finance our clients’ positions, and we could be held responsible for the defaults or misconduct of our clients. Default risk may arise from events or circumstances that are difficult to detect or foresee.
Concentration of risk increases the potential for significant losses in our market-making, underwriting, investing and financing activities.
Concentration of risk increases the potential for significant losses in our market-making, underwriting, investing and financing activities. The number and size of these transactions has affected and may in the future affect our results of operations in a given period. Moreover, because of concentrated risk, we may suffer losses even when economic and market conditions are generally favorable for our competitors. Disruptions in the credit markets can make it difficult to hedge these credit exposures effectively or economically. In addition, we extend large commitments as part of our credit origination activities. Disruptions in the credit markets have in the past substantially curtailed or eliminated and may in the future substantially curtail or eliminate the trading markets for loans we originate. These disruptions have in the past made and may in the future make it difficult for us to sell or value such assets, which have in the past resulted and may in the future result in losses for us.
Rules adopted under the Dodd-Frank Act, and similar rules adopted in other jurisdictions, require issuers of certain asset-backed securities and any person who organizes and initiates certain asset-backed securities transactions to retain economic exposure to the asset, which has affected the cost of and structures used in connection with these securitization activities. Our inability to reduce our credit risk by selling, syndicating or securitizing these positions, including during periods of market stress, has in the past negatively affected and may in the future negatively affect our results of operations due to a decrease in the fair value of the positions, including due to the insolvency or bankruptcy of borrowers, as well as the loss of revenues associated with selling such securities or loans.
In the ordinary course of business, we are at times subject to a concentration of credit risk to a particular counterparty, borrower, issuer (including sovereign issuers) or geographic area or group of related countries, such as the E.U., and a failure or downgrade of, or default by, such entity could negatively impact our businesses, perhaps materially, and the systems by which we set limits and monitor the level of our credit exposure to individual entities, industries, countries and regions may not function as we have anticipated. Regulatory reform, including the Dodd-Frank Act, has led to increased centralization of trading activity through particular clearinghouses, agent banks or exchanges, which has significantly increased our concentration of risk with respect to these entities. Our activities expose us to many different counterparties and countries, as well as different industries, including new and emerging industries, such as those related to AI. In particular, we routinely execute a high volume of transactions with counterparties or extend credit to borrowers engaged in financial services activities, including brokers and dealers, commercial banks, clearinghouses, exchanges, alternative asset managers and investment funds. This has resulted in significant credit concentration with respect to these counterparties.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Derivative transactions and delayed documentation or settlements expose us to credit risk, unexpected risks and potential losses.
We are party to a large number of derivative transactions, including credit derivatives. Many of these derivative instruments are individually negotiated and non-standardized, which can make exiting, transferring or settling positions difficult. Many credit derivatives require that we deliver to the counterparty the underlying security, loan or other obligation in order to receive payment. In a number of cases, we do not hold the underlying security, loan or other obligation and may not be able to obtain the underlying security, loan or other obligation. This could cause us to forfeit the payments due to us under these contracts or result in settlement delays with the attendant credit and operational risk, as well as increased costs to us.
Derivative transactions also involve the risk that documentation has not been properly executed, that executed agreements may not be enforceable against the counterparty, or that obligations under such agreements may not be able to be “netted” against other obligations with such counterparty. In addition, counterparties may claim that such transactions were not appropriate or authorized.
As a signatory to the ISDA Universal Protocol and U.S. ISDA Protocol (ISDA Protocols) and being subject to the FRB’s and FDIC’s rules on QFCs and similar rules in other jurisdictions, we may not be able to exercise remedies against counterparties and, as this regime has not yet been tested, we may suffer risks or losses that we would not have expected to suffer if we could immediately close out transactions upon a termination event. The ISDA Protocols and these rules and regulations extend to repurchase agreements and other instruments that are not derivative contracts.
Derivative contracts and other transactions, including secondary bank loan purchases and sales, entered into with third parties are not always confirmed by the counterparties or settled on a timely basis. While the transaction remains unconfirmed or during any delay in settlement, we are subject to heightened credit and operational risk and in the event of a default may find it more difficult to enforce our rights.
In addition, as new complex derivative products are created, covering a wider array of underlying credit and other instruments, disputes about the terms of the underlying contracts could arise, which could impair our ability to effectively manage our risk exposures from these products and subject us to increased costs. The provisions of the Dodd-Frank Act requiring central clearing of credit derivatives and other OTC derivatives, or a market shift toward standardized derivatives, could reduce the risk associated with these transactions, but under certain circumstances could also limit our ability to develop derivatives that best suit the needs of our clients and to hedge our own risks, and could adversely affect our profitability. In addition, these provisions have increased our credit exposure to central clearing platforms.
Operational
A failure in our or third-party operational systems or human error, malfeasance or other misconduct, could impair our liquidity, disrupt our businesses, result in the disclosure of confidential information, damage our reputation and cause losses.
Our businesses are highly dependent on our ability to process and monitor, on a daily basis, a very large number of transactions, many of which are highly complex and occur at high volumes and frequencies, across numerous and diverse markets in many currencies. These transactions, as well as the information technology services we provide to clients, often must adhere to client-specific guidelines, as well as legal and regulatory standards.
Many rules and regulations worldwide govern our obligations to execute transactions and report transactions and other information to regulators, exchanges and investors. Compliance with these legal and reporting requirements can be challenging, and we have been and may in the future be subject to regulatory fines and penalties for failing to follow these rules or to report timely, accurate and complete information in accordance with these rules.
As the volume, speed, frequency and complexity of transactions, especially electronic transactions (as well as the requirements to report such transactions on a real-time basis to clients, regulators and exchanges) increase, developing and maintaining our operational systems and infrastructure has become more challenging, and the risk of systems or human error by us or our third-party service providers in connection with such transactions has increased, as have the potential consequences of errors due to the speed and volume of transactions involved and the potential difficulty associated with discovering errors quickly enough to limit the resulting consequences. These risks are exacerbated in times of increased volatility. As with other similarly situated institutions, we utilize credit underwriting models in connection with our businesses, including our consumer-oriented activities. Allegations or publicity, whether or not accurate, that our underwriting and other business decisions, including with respect to the provision of financial services, do not treat clients or consumers fairly, or comply with the applicable law or regulation, have in the past resulted and may in the future result in negative publicity, reputational damage and governmental and regulatory scrutiny, investigations and enforcement actions.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Our financial, accounting, data processing or other operational systems and facilities have in the past not operated properly in certain respects and may in the future not operate properly or become disabled as a result of events that are wholly or partially beyond our control, such as a spike in transaction volume or an operational disruption at a third-party service provider, adversely affecting our ability to process these transactions or provide these services. We must continuously update our systems to support our operations and growth and to respond to changes in regulations and markets, and invest heavily in systemic controls and training so that transactions do not violate applicable rules and regulations or, due to errors in processing such transactions, adversely affect markets, our clients and counterparties or us. Enhancements and updates to systems, as well as the requisite training, including in connection with the integration of new businesses, entail significant costs and create risks associated with implementing new systems and integrating them with existing ones.
The use of computing devices, phones and other mobile devices is critical to the work done by our employees and the operation of our systems and businesses and those of our clients and our third-party service providers and vendors. Their importance has continued to increase, for both our regular operations and business continuity plans. Computers and computer networks are subject to various risks, including, among others, cyber attacks, inherent technological defects, system disruptions and failures and human error. For example, fundamental security flaws in computer chips found in many types of these computing devices and phones have been reported in the past and may occur in the future, and in July 2024 there was a widely publicized information technology outage as a result of a faulty update to a cybersecurity software product that affected many businesses worldwide. The use of personal devices by our employees or by our vendors for work-related activities also presents risks related to potential violations of record retention and other requirements. Cloud technologies are also critical to the operation of our systems and platforms and our reliance on cloud technologies is growing. Service disruptions have resulted, and may result in the future, in delays in accessing, or the loss of, data that is important to our businesses and may hinder our clients’ access to our platforms. There have been a number of widely publicized cases of outages in connection with access to cloud computing providers, such as an incident in October 2025 that affected many businesses worldwide, including us. Addressing these and similar issues could be costly and affect the performance of these businesses and systems. Applying fixes can introduce operational risks, and, despite the fixes, there may still be residual security risks.
Notwithstanding the proliferation of technology and technology-based risk and control systems, our businesses ultimately rely on people as our greatest resource, and, from time to time, they have in the past made mistakes or engaged in violations of applicable policies, laws, rules or procedures and may in the future make mistakes or engage in such violations that are not always caught immediately by our technological processes or by our controls and other procedures, which are intended to prevent and detect such errors or violations. These have in the past included and may in the future include calculation errors, mistakes in addressing emails, errors in software or model development or implementation, or simple errors in judgment, as well as intentional efforts to ignore or circumvent applicable policies, laws, rules or procedures. Human errors, malfeasance and other misconduct, including the intentional misuse of client information in connection with insider trading or for other purposes, even if promptly discovered and remediated, has in the past resulted and may in the future result in reputational damage and losses and liabilities for us.
The majority of the employees in our primary locations, including the New York metropolitan area, London, Tokyo, Hong Kong, Bengaluru, Hyderabad, Salt Lake City, Dallas, Singapore, Warsaw and Birmingham, work in close proximity to one another. Our headquarters is located in the New York metropolitan area, and we have our largest employee concentration occupying two principal office buildings near the Hudson River waterfront. They are subject to potential catastrophic events, including, but not limited to, extreme weather or terrorist attacks or other hostile events that could negatively affect our business. Notwithstanding our efforts to maintain business continuity, business disruptions impacting our offices and employees could lead to our employees’ inability to occupy the offices, communicate with or travel to other office locations or work remotely. As a result, our ability to service and interact with clients may be adversely impacted, due to our failure or inability to successfully implement business contingency plans.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
A failure or disruption in our infrastructure, or in the operational systems or infrastructure of third parties, could impair our liquidity, disrupt our businesses, damage our reputation and cause losses.
We face the risk of operational failure or significant operational delay, termination or capacity constraints of any of the clearing agents, exchanges, clearinghouses or other financial intermediaries we use to facilitate our securities and derivatives transactions, and as our interconnectivity with our clients grows, we increasingly face the risk of operational failure or significant operational delay with respect to our clients’ systems.
There has been significant consolidation among clearing agents, exchanges and clearinghouses and an increasing number of derivative transactions are cleared on exchanges, which has increased our exposure to operational failure or significant operational delay, termination or capacity constraints of the particular financial intermediaries that we use and could affect our ability to find adequate and cost-effective alternatives in the event of any such failure, delay, termination or constraint. Industry consolidation, whether among market participants or financial intermediaries, increases the risk of operational failure or significant operational delay as disparate complex systems need to be integrated, often on an accelerated basis.
The interconnectivity of multiple financial institutions with agent banks, exchanges and clearinghouses, and the increased centrality of these entities, increases the risk that an operational failure at one institution or entity may cause an industry-wide operational failure that could materially impact our ability to conduct business. Interconnectivity of financial institutions with other companies through, among other things, application programming interfaces or APIs presents similar risks. Any such failure, termination or constraint could adversely affect our ability to effect transactions, service our clients, manage our exposure to risk or expand our businesses or result in financial loss or liability to our clients, impairment of our liquidity, disruption of our businesses, regulatory intervention or reputational damage.
Despite our resiliency plans and facilities, our ability to conduct business may be adversely impacted by a disruption in the infrastructure that supports our businesses and the communities where we are located. This may include a disruption involving electrical, satellite, undersea cable or other communications, internet, transportation or other facilities used by us, our employees or third parties with which we conduct business, including cloud service providers. These disruptions may occur as a result of events that affect only our buildings or systems or those of third parties, or as a result of events with a broader impact globally, regionally or in the cities where those buildings or systems are located, including, but not limited to, natural disasters, war, civil unrest, terrorism, economic or political developments, pandemics and weather events.
In addition, although we seek to diversify our third-party vendors to increase our resiliency, we are exposed to risks if our vendors operate in the same area and are also exposed to the risk that a disruption or other information technology event at a common service provider to our vendors could impede their ability to provide products or services to us. We may not be able to effectively monitor or mitigate operational risks relating to our vendors’ use of common service providers.
Additionally, although the prevalence and scope of applications of distributed ledger technology, cryptocurrency and similar technologies is growing, the technology is nascent and may be vulnerable to cyber attacks or have other inherent weaknesses. We are exposed to risks, and may become exposed to additional risks, related to distributed ledger technology, including through our facilitation of activities involving financial products that use distributed ledger technology, such as blockchain, cryptocurrencies, stablecoins or other digital assets, our investments in companies that seek to develop platforms based on distributed ledger technology, the use of distributed ledger technology by us, third-party vendors, clients, counterparties, clearinghouses and other financial intermediaries, and the receipt or use of cryptocurrencies or other digital assets as collateral. Market volatility of financial products using distributed ledger technology may increase these risks.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
The development and use of AI present risks and challenges that may adversely impact our business.
We or our third-party vendors, clients or counterparties have in the past developed or incorporated and may in the future develop or incorporate AI technology in certain business processes, services or products. The development and use of AI present a number of risks and challenges to our business. The legal and regulatory environment relating to AI is uncertain and rapidly evolving, both in the U.S. and internationally, and includes regulation targeted specifically at AI, as well as provisions in intellectual property, privacy, consumer protection, employment and other laws applicable to the use of AI. These evolving laws and regulations have in the past required and may in the future require changes in our implementation of AI technology and increase our compliance costs and the risk of non-compliance. AI models, particularly generative AI models, may produce output or take action that is incorrect, that result in the release of private, confidential or proprietary information, that reflect biases included in the data on which they are trained, infringe on the intellectual property rights of others, or that is otherwise harmful. In addition, the complexity of many AI models makes it challenging to understand why they are generating particular outputs. This limited transparency increases the challenges associated with assessing the proper operation of AI models, understanding and monitoring the capabilities of the AI models, reducing erroneous output, eliminating bias and complying with regulations that require documentation or explanation of the basis on which decisions are made. Further, we rely on AI models developed by third parties, and, to that extent, are dependent in part on the manner in which those third parties develop and train their models, including risks arising from the inclusion of any unauthorized material in the training data for their models, and the effectiveness of the steps these third parties have taken to limit the risks associated with the output of their models, matters over which we may have limited visibility. Additionally, we are exposed to risks related to the use of AI technologies by third-party vendors, clients, counterparties, clearinghouses and other financial intermediaries. Any of these risks could expose us to liability or adverse legal or regulatory consequences and harm our reputation and the public perception of our business or the effectiveness of our security measures, and, as we expand the development and incorporation of AI technologies in our business processes, services or products, including in connection with our OneGS 3.0 initiative, these risks may be heightened.
In addition to our use of AI technologies, we are exposed to risks arising from the use of AI technologies by bad actors to commit fraud and misappropriate funds and to facilitate cyber attacks. Generative AI, if used to perpetrate fraud or launch cyber attacks, could result in losses, liquidity outflows or other adverse effects for us and our clients.
A failure to protect our computer systems, networks and information, and our clients’ information, against cyber attacks and similar threats could impair our ability to conduct our businesses, result in the disclosure, theft or destruction of confidential information, damage our reputation and cause losses.
Our operations rely on the secure processing, storage and transmission of confidential and other information in our computer systems and networks and those of our vendors. There have been a number of highly publicized cases involving financial services companies, consumer-based companies, software and information technology service providers, governmental agencies and other organizations reporting the unauthorized access or disclosure of client, customer or other confidential information in recent years, as well as cyber attacks involving the dissemination, theft and destruction of corporate information or other assets, as a result of inadequate procedures or the failure to follow procedures by employees or contractors or as a result of actions by third parties, including actions by foreign governments. There have also been a number of highly publicized cases where hackers have requested “ransom” payments in exchange for not disclosing customer information or for restoring access to information or systems.
We are regularly the target of attempted cyber attacks, including denial-of-service attacks, and must continuously monitor and develop our systems to protect the integrity and functionality of our technology infrastructure and access to and the security of our data. We have faced a high volume of cyber attacks as we expand our mobile- and other internet-based products and services, as well as our usage of mobile and cloud technologies, and as we provide these services to individual consumers. Further, the use of AI by cybercriminals may increase the frequency and severity of cybersecurity attacks against us or our third-party vendors and clients. The use of employee-owned devices presents additional risks of cyber attacks, as do hybrid work arrangements. In addition, due to our interconnectivity with third-party vendors (and their respective service providers), agent banks, exchanges, clearinghouses and other financial institutions, we have been, and could in the future be, adversely impacted if any of them is subject to a successful cyber attack or other information security event. These impacts could include the loss of access to information or services from the third party subject to the cyber attack or other information security event or could result in unauthorized access to or disclosure of client, customer or other confidential information, which could, in turn, interrupt certain of our businesses or adversely affect our results of operations and reputation.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Despite our efforts to ensure the integrity of our systems and information, we may not be able to anticipate, detect or implement effective preventive measures against all cyber threats, including because the techniques used are increasingly sophisticated, change frequently and are often not recognized until launched. Cyber attacks can originate from a variety of sources, including third parties who are affiliated with or sponsored by foreign governments or are involved with organized crime or terrorist organizations. Third parties may also attempt to place individuals in our offices or induce employees, clients or other users of our systems to disclose sensitive information or provide access to our data or that of our clients, and these types of risks may be difficult to detect or prevent.
Although we take protective measures proactively and endeavor to modify them as circumstances warrant, our computer systems, software and networks may be vulnerable to unauthorized access, misuse, phishing or other fraudulent schemes, computer viruses or other malicious code, cyber attacks on our vendors and other events that could have a security impact. Risks relating to cyber attacks on our vendors have been increasing given the greater frequency and severity in recent years of supply chain attacks affecting software and information technology service providers. Due to the complexity and interconnectedness of our systems, the process of enhancing our protective measures can itself create a risk of systems disruptions and security issues. In addition, protective measures that we employ to compartmentalize our data may reduce our visibility into, and adversely affect our ability to respond to, cyber threats and issues with our systems.
If one or more of these types of events occur, it potentially could jeopardize our, our clients’, our counterparties’ or third parties’ confidential and other information processed, stored in, or transmitted through our computer systems and networks, or otherwise cause interruptions or malfunctions in our operations or those of our clients, counterparties or third parties, which could impact their ability to transact with us or otherwise result in legal or regulatory action, significant losses or reputational damage. In addition, such an event could persist for an extended period of time before being properly detected or escalated, and, following detection or escalation, it could take considerable time for us to obtain full and reliable information about the extent, amount and type of information compromised. During the course of an investigation, we may not know the full impact of the event and how to remediate it, and actions, decisions and mistakes that are taken or made may further increase the negative effects of the event on our business, results of operations and reputation. Moreover, regulations require us to disclose information on a timely basis about material cybersecurity incidents, including those that may not have been resolved or fully investigated at the time of disclosure.
We have expended, and may continue to expend, significant resources on an ongoing basis to modify our protective measures and to investigate and remediate vulnerabilities or other exposures, but these measures may be ineffective and we may be subject to legal or regulatory action, as well as financial losses that are either not insured against or not fully covered through any insurance maintained by us. Regulatory agencies have become increasingly focused on cybersecurity incidents.
Our clients’ confidential information may also be at risk from the compromise of clients’ accounts, including as a result of a data security breach at a third-party. Losses due to unauthorized account activity could harm our reputation and may have adverse effects on our business, financial condition and results of operations.
The increased use of mobile and cloud technologies heightens these and other operational risks, as do hybrid work arrangements. Certain aspects of the security of these technologies are unpredictable or beyond our control, and the failure by mobile technology and cloud service providers to adequately safeguard their systems and prevent cyber attacks could disrupt our operations and result in misappropriation, corruption, unavailability or loss of confidential and other information. In addition, there is a risk that encryption and other protective measures, despite their sophistication, may be defeated, particularly to the extent that new computing technologies, such as quantum computing, vastly increase the speed and computing power available.
We routinely transmit and receive personal, confidential and proprietary information by email and other electronic means. We have discussed and worked with clients, vendors, service providers, counterparties and other third parties to develop secure transmission capabilities and protect against cyber attacks, but we do not have, and may be unable to put in place, secure capabilities with all of our clients, vendors, service providers, counterparties and other third parties and we may not be able to ensure that these third parties have appropriate controls in place to protect the confidentiality of the information. An interception, misuse or mishandling of personal, confidential or proprietary information being sent to or received from a client, vendor, service provider, counterparty or other third party could result in legal liability, regulatory action, reputational harm and losses.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
We have in the past incurred and may in the future incur losses as a result of ineffective risk management processes and strategies.
We seek to monitor and control our risk exposure through a risk and control framework encompassing a variety of separate but complementary financial, credit, operational, compliance and legal systems, internal controls, management review processes and other mechanisms. Our risk management process seeks to balance our ability to profit from market-making, investing or lending positions, and underwriting activities, with our exposure to potential losses. While we employ a broad and diversified set of risk monitoring and risk mitigation techniques, those techniques and the judgments that accompany their application cannot anticipate every economic and financial outcome or the specifics and timing of such outcomes. Thus, in the course of our activities, we have incurred and may in the future incur losses. Market conditions in recent years have involved unprecedented dislocations and highlight the limitations inherent in using historical data to manage risk.
The models that we use to assess and control our risk exposures reflect assumptions about the degrees of correlation or lack thereof among prices of various asset classes or other market indicators. In times of market stress or other unforeseen circumstances, previously uncorrelated indicators may become correlated, or conversely previously correlated indicators may move in different directions. These types of market movements have at times limited the effectiveness of our hedging strategies and have caused us to incur significant losses, and they may do so in the future. These changes in correlation have been and may in the future be exacerbated where other market participants are using risk or trading models with assumptions or algorithms that are similar to ours. In these and other cases, it may be difficult to reduce our risk positions due to the activity of other market participants or widespread market dislocations, including circumstances where asset values are declining significantly or no market exists for certain assets.
In addition, the use of models in connection with risk management and numerous other critical activities presents risks that the models may be ineffective, either because of poor design, ineffective testing, or improper or flawed inputs, as well as unpermitted access to the models resulting in unapproved or malicious changes to the model or its inputs.
To the extent that we have positions through our market-making or origination activities or we make investments directly through our investing activities, including private equity or private credit, that do not have an established liquid trading market or are otherwise subject to restrictions on sale or hedging, we may not be able to reduce our positions and therefore reduce our risk associated with those positions. In addition, to the extent permitted by applicable law and regulation, we invest our own capital in private equity, credit, real estate and hedge funds that we manage and limitations on our ability to withdraw some or all of our investments in these funds, whether for legal, reputational or other reasons, may make it more difficult for us to control the risk exposures relating to these investments.
Prudent risk management, as well as regulatory restrictions, may cause us to limit our exposure to counterparties, geographic areas or markets, which may limit our business opportunities and increase the cost of our funding or hedging activities.
Although we have substantially completed the narrowing of our focus on our consumer-related activities, our remaining consumer offerings present us with risks, and we have needed and continue to need to adapt our risk monitoring and mitigation activities to account for these business activities. A failure to adequately assess and control such risk exposures has in the past resulted and could in the future result in losses to us.
For further information about our risk management policies and procedures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management” in Part II, Item 7 of this Form 10-K.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Legal and Regulatory
Our businesses and those of our clients are subject to extensive and pervasive regulation around the world.
As a participant in the financial services industry and a globally systemically important financial institution, we are subject to extensive regulation in jurisdictions around the world. We face the risk of significant intervention by law enforcement, regulatory and taxing authorities, as well as private litigation, in all jurisdictions in which we conduct our businesses. In many cases, our activities have been and may continue to be subject to overlapping and divergent regulation in different jurisdictions. Among other things, as a result of law enforcement authorities, regulators or private parties challenging our compliance with existing laws and regulations, we or our employees have been, and could be, fined, criminally charged or sanctioned; prohibited from engaging in some of our business activities; subjected to limitations or conditions on our business activities, including higher capital requirements; or subjected to new or substantially higher taxes or other governmental charges in connection with the conduct of our businesses or with respect to our employees. These limitations or conditions may limit our business activities and negatively impact our profitability.
In addition to the impact on the scope and profitability of our business activities, day-to-day compliance with existing laws and regulations has involved and will continue to involve significant amounts of time, including that of our senior leaders and that of a large number of dedicated compliance and other reporting and operational personnel, all of which may negatively impact our profitability.
Our revenues and profitability and those of our competitors have been and will continue to be impacted by requirements relating to capital, leverage, liquidity and long-term funding levels, requirements related to recovery and resolution planning, derivatives clearing and margin rules and levels of regulatory oversight, as well as limitations on which and, if permitted, how certain business activities may be carried out by financial institutions. The laws, regulations and accounting standards (including tax statutes and regulations), that apply to our businesses are often complex and, in many cases, we must make interpretive decisions regarding the application of those laws, regulations and accounting standards (including tax statutes and regulations) to our business activities. Changes in interpretations, whether in response to regulatory or tax authority guidance, industry conventions, our own reassessments or otherwise, could adversely affect our businesses, results of operations or ability to satisfy applicable regulatory requirements, such as capital or liquidity requirements.
If there are new laws or regulations or changes in the interpretation or enforcement of existing laws or regulations applicable to our businesses or those of our clients, including capital, liquidity, leverage, long-term debt, total loss-absorbing capacity and margin requirements, restrictions on leveraged lending or other business practices, reporting requirements, requirements relating to recovery and resolution planning, tax burdens and compensation restrictions, that are imposed on a limited subset of financial institutions (whether based on size, method of funding, activities, geography or other criteria), compliance with these new laws or regulations, or changes in the enforcement of existing laws or regulations, could adversely affect our ability to compete effectively with other institutions that are not affected in the same way. In addition, regulation imposed on financial institutions or market participants generally, such as taxes on stock transfers, share repurchases and other financial transactions, could adversely impact levels of market activity more broadly, and thus impact our businesses. Changes to laws or regulations, such as tax laws, could also have a disproportionate impact on us, based on the way those laws or regulations are applied to financial services and financial firms or due to our corporate structure or where or how we provide these services.
These developments could impact our profitability in the affected jurisdictions, or even make it uneconomic for us to continue to conduct all or certain of our businesses in those jurisdictions, or could cause us to incur significant costs associated with changing our business practices, restructuring our businesses, moving all or certain of our businesses and our employees to other locations or complying with applicable capital requirements, including reducing dividends or share repurchases, liquidating assets or raising capital in a manner that adversely increases our funding costs or otherwise adversely affects our shareholders and creditors.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
U.S. and non-U.S. regulatory developments, in particular the Dodd-Frank Act and Basel III, have significantly altered the regulatory framework within which we operate and have adversely affected and may in the future adversely affect our profitability. Among the aspects of the Dodd-Frank Act that have affected or may in the future affect our businesses are: increased capital, liquidity and reporting requirements; limitations on activities in which we may engage; increased regulation of and restrictions on OTC derivatives markets and transactions; limitations on incentive compensation; limitations on affiliate transactions; requirements to reorganize or limit activities in connection with recovery and resolution planning; increased deposit insurance assessments; and increased standards of care for broker-dealers and investment advisers in dealing with clients. The implementation of higher capital requirements, more stringent requirements relating to liquidity, long-term debt and total loss-absorbing capacity and the prohibition on proprietary trading and the sponsorship of, or investment in, covered funds by the Volcker Rule may continue to adversely affect our profitability and competitive position, particularly where these requirements do not apply equally to our competitors. We may become subject to higher and more stringent capital and other regulatory requirements as a result of the implementation of the Basel Committee’s finalization of the post-crisis regulatory capital reforms, as well as future Basel Committee standards. See “Business — Regulation — Banking Supervision and Regulation — Risk-Based Capital Ratios” in Part I, Item 1 of this Form 10-K for further information about proposed and adopted regulatory requirements.
As described in “Business — Regulation — Banking Supervision and Regulation — Risk-Based Capital Ratios” in Part I, Item 1 of this Form 10-K, the SCB has replaced the capital conservation buffer under the Standardized Capital Rules and in the past has resulted in and may in the future result in higher and more volatile Standardized capital ratio requirements. Failure to comply with these requirements could limit our ability to, among other things, repurchase shares, pay dividends and make certain discretionary compensation payments. In addition, if we are required to resubmit our capital plan, we generally may not make capital distributions, such as common stock repurchases or dividends or preferred stock redemptions, without the prior approval of the FRB. Dividends and repurchases are also subject to oversight by the FRB, which can result in limitations. Limitations on our ability to make capital distributions could, among other things, prevent us from returning capital to our shareholders and impact our return on equity. Additionally, as a G‑SIB, we are subject to the G‑SIB surcharge. Our G‑SIB surcharge is updated annually based on financial data from the prior year. Expansion of our businesses, growth in our balance sheet and increased reliance on short-term wholesale funding have resulted in increases and in the future may result in further increases in our G‑SIB surcharge and a corresponding increase in our capital requirements. The July 2023 proposal from the FRB would introduce additional granularity in the surcharge buckets and increase the amount of financial data used in the calculation of the G-SIB surcharge based on averages over the year, as opposed to period-end values, which could increase our G-SIB surcharge.
We are also subject to laws and regulations, such as the GDPR and the California Consumer Privacy Act, relating to the privacy of the information of clients, employees or others, and any failure to comply with these laws and regulations could expose us to liability and/or reputational damage. As new privacy-related laws and regulations are implemented, the time and resources needed for us to comply with such laws and regulations, as well as our potential liability for non-compliance and reporting obligations in the case of data breaches, may significantly increase.
In addition, our businesses are increasingly subject to laws and regulations relating to surveillance, encryption and data on-shoring in the jurisdictions in which we operate. Compliance with these laws and regulations may require us to change our policies, procedures and technology for information security, which could, among other things, make us more vulnerable to cyber attacks and other misappropriation, corruption, unavailability or loss of information or technology.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Our consumer-oriented deposit-taking and credit card businesses subject us to numerous additional regulations in the jurisdictions in which these businesses operate. Not only are these regulations extensive, but they involve types of regulations and supervision, as well as regulatory compliance risks, that have not historically applied to us. The level of regulatory scrutiny and the scope of regulations affecting financial interactions with consumers is often much greater than that associated with doing business with institutions and high-net-worth individuals. Complying with these regulations is time-consuming, costly and presents new and increased risks.
GS Bank USA is assessed pursuant to a strategic plan for CRA compliance purposes. Any failure to comply with CRA requirements could negatively impact GS Bank USA’s CRA ratings, cause reputational harm and result in limits on our ability to make future acquisitions or engage in certain new activities.
Increasingly, regulators and courts have sought to hold financial institutions liable for the misconduct of their clients where they have determined that the financial institution should have detected that the client was engaged in wrongdoing, even though the financial institution had no direct knowledge of the activities engaged in by its client. Regulators and courts have also increasingly found liability as a “control person” for activities of entities in which financial institutions or funds controlled by financial institutions have an investment, but which they do not actively manage. In addition, regulators and courts continue to seek to establish “fiduciary” obligations to counterparties to which no such duty had been thought to exist. To the extent that such efforts are successful, the cost of, and liabilities associated with, engaging in brokerage, clearing, market-making, prime financing, investing and other similar activities could increase significantly. To the extent that we have fiduciary obligations in connection with acting as a financial adviser or investment adviser or in other roles for individual, institutional, sovereign or investment fund clients, any breach, or even an alleged breach, of such obligations could have materially negative legal, regulatory and reputational consequences.
For information about the extensive regulation to which our businesses are subject, see “Business — Regulation” in Part I, Item 1 of this Form 10-K.
A failure to appropriately identify and address potential conflicts of interest has in the past adversely affected and may in the future adversely affect our businesses.
Due to the broad scope of our businesses and our client base, we regularly address potential conflicts of interest, including situations where our services to a particular client or our own investments or other interests conflict, or are perceived to conflict, with the interests of that client or another client, as well as situations where one or more of our businesses have access to material non-public information that may not be shared with our other businesses and situations where we may be a creditor of an entity with which we also have an advisory or other relationship.
In addition, our status as a BHC subjects us to heightened regulation and increased regulatory scrutiny by the FRB with respect to transactions between GS Bank USA and its subsidiaries and entities that are or could be viewed as affiliates of ours and, under the Volcker Rule, transactions between us and covered funds.
We have extensive procedures and controls that are designed to identify and address conflicts of interest, including those designed to prevent the improper sharing of information among our businesses. However, appropriately identifying and dealing with conflicts of interest is complex and difficult, and our reputation, which is one of our most important assets, could be damaged and the willingness of clients to enter into transactions with us may be adversely affected if we fail, or appear to fail, to identify, disclose and deal appropriately with conflicts of interest. In addition, potential or perceived conflicts have in the past given and may in the future give rise to litigation, government investigations or enforcement actions. Additionally, our One Goldman Sachs initiative, as well as the alignment of our businesses, aim to increase collaboration among our businesses, which may increase the potential for actual or perceived conflicts of interest and improper information sharing.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
We may be adversely affected by governmental and regulatory scrutiny or negative publicity.
We are subject to governmental scrutiny from regulators, legislative bodies and law enforcement agencies with respect to matters relating to compensation, our business practices, our past actions and other matters. Political and public sentiment regarding financial institutions has in the past resulted and may in the future result in a significant amount of adverse press coverage, as well as adverse statements or charges by regulators or other government officials. Press coverage and other public statements that assert some form of wrongdoing (including, in some cases, press coverage and public statements that do not directly involve us) have in the past resulted and may in the future result in some type of investigation by regulators, legislators and law enforcement officials or in lawsuits.
Responding to these investigations and lawsuits, regardless of the ultimate outcome of the proceeding, is time-consuming and expensive and can divert the time and effort of our senior management from our business. Penalties and fines sought by regulatory authorities have increased substantially over time. Governmental authorities may also pursue criminal or other actions, including seeking admissions of wrongdoing or guilty pleas, in connection with the resolution of an inquiry or investigation to the extent a company is viewed as having previously engaged in criminal, regulatory or other misconduct. Adverse publicity, governmental scrutiny and legal and enforcement proceedings can also have a negative impact on our reputation and on the morale and performance of our employees, which could adversely affect our businesses and results of operations. Further, we have in the past been and could in the future be subject to regulatory settlements, orders and feedback that require significant remediation activities and enhancements to existing controls, systems and procedures, which has required us to commit significant resources, including hiring, as well as testing the operation and effectiveness of new controls, policies and procedures. The failure to complete remediation activities in a timely manner could lead to higher operating expenses, reputational damage and other negative consequences.
The financial services industry generally and our businesses in particular have been subject to negative publicity. Our reputation and businesses may be adversely affected by negative publicity or information regarding our businesses, personnel, corporate engagement programs and other initiatives, whether or not accurate or true, that may be posted on social media or other internet forums or published by news organizations. Postings on these types of forums may also adversely impact risk positions of our clients and other parties that owe us money, securities or other assets and increase the chance that they will not perform their obligations to us or reduce the revenues we receive from their use of our services. The speed and pervasiveness with which information can be disseminated through these channels, in particular social media, may magnify risks relating to negative publicity.
In 2023, the rapid dissemination of negative information through social media, in part, is believed to have led to the collapse of Silicon Valley Bank (SVB). SVB suffered a level of deposit withdrawals within a time period not previously experienced by a financial institution. We could also be subject to rapid deposit withdrawals or other outflows as a result of negative social media posts or other negative publicity.
Substantial civil or criminal liability or significant regulatory action against us has in the past had and may in the future have material adverse financial effects and significant reputational consequences, which in turn could seriously harm our business prospects.
We face significant legal risks in our businesses, and the volume of claims and amount of damages and penalties claimed in litigation and regulatory proceedings against financial institutions remain high. See Notes 18 and 27 to the consolidated financial statements in Part II, Item 8 of this Form 10-K for information about certain of our legal and regulatory proceedings and investigations. We have seen legal claims by consumers and clients increase in a market downturn and employment-related claims increase following periods in which we have reduced our headcount. Additionally, governmental entities have been plaintiffs and are parties in certain of our legal proceedings, and we may face future civil or criminal actions or claims by the same or other governmental entities, as well as follow-on civil litigation that is often commenced after regulatory settlements.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Significant settlements by large financial institutions, including, in some cases, us, with governmental entities have become common. The trend of large settlements with governmental entities may adversely affect the outcomes for other financial institutions, including, in some cases, us, in similar actions, especially where governmental officials have announced that the large settlements will be used as the basis or a template for other settlements. The uncertain regulatory enforcement environment makes it difficult to estimate probable losses, which can lead to substantial disparities between legal reserves and subsequent actual settlements or penalties.
Claims of collusion or anti-competitive conduct have become more common. Financial institutions (including us) have been subject to civil cases and investigatory demands relating to alleged bid-rigging, group boycotts or other anti-competitive practices. Antitrust laws generally provide for joint and several liability and treble damages. These claims have resulted in significant settlements and fines for us in the past and may do so in the future.
We are subject to laws and regulations worldwide, including the FCPA and the U.K. Bribery Act, relating to corrupt and illegal payments to, and hiring practices with regard to, government officials and others. Violation of these or similar laws and regulations have in the past resulted in and could in the future result in significant monetary penalties. Such violations could also result in severe restrictions on our activities and damage to our reputation.
Certain law enforcement authorities have recently required admissions of wrongdoing, and, in some cases, criminal pleas, as part of the resolutions of matters brought against financial institutions or their employees. See for example, “1MDB-Related Matters” in Note 27 to the consolidated financial statements in Part II, Item 8 of this Form 10-K. Any such resolution of a criminal matter involving us or our employees could lead to increased exposure to civil litigation, could adversely affect our reputation, could result in penalties or limitations on our ability to conduct our activities generally or in certain circumstances and could have other negative effects.
In conducting our businesses around the world, we are subject to political, legal, regulatory, tax and other risks that are inherent in operating in many countries.
In conducting our businesses and supporting our global operations, we are subject to risks of possible nationalization, expropriation, price controls, capital controls, exchange controls, communications and other content restrictions, and other restrictive governmental actions. For example, sanctions have been imposed by the U.S. and the E.U. on certain individuals and companies in Russia and Venezuela. In many countries, the laws and regulations applicable to the securities and financial services industries and many of the transactions in which we are involved are uncertain and evolving, and it may be difficult for us to determine the exact requirements of local laws in every market. We have been, in some cases, subject to divergent and conflicting laws and regulations across markets, and we are increasingly subject to the risk that the jurisdictions in which we operate have implemented or may implement laws and regulations that directly conflict with those of another jurisdiction. Any determination by local regulators that we have not acted in compliance with the application of local laws in a particular market or our failure to develop effective working relationships with local regulators could have a significant and negative effect not only on our businesses in that market, but also on our reputation generally. Further, in some jurisdictions a failure, or alleged failure, to comply with laws and regulations has subjected and may in the future subject us and our personnel not only to civil actions, but also criminal actions and other sanctions. We are also subject to the enhanced risk that transactions we structure might not be legally enforceable in all cases.
While business and other practices throughout the world differ, our principal entities are subject in their operations worldwide to rules and regulations relating to corrupt and illegal payments, hiring practices and money laundering, as well as laws relating to doing business with certain individuals, groups and countries, such as the FCPA, the BSA and the U.K. Bribery Act. While we have invested and continue to invest significant resources in training and in compliance monitoring, the geographical diversity of our operations, employees, clients and consumers, as well as the vendors and other third parties that we deal with, greatly increases the risk that we may be found in violation of such rules or regulations and such violations have in the past subjected and could in the future subject us to significant penalties or adversely affect our reputation. See for example, “1MDB-Related Matters” in Note 27 to the consolidated financial statements in Part II, Item 8 of this Form 10-K.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
In addition, there have been a number of highly publicized cases around the world, involving actual or alleged fraud or other misconduct by employees in the financial services industry, and we have had and may in the future have employee misconduct. This misconduct has included and may also in the future include intentional efforts to ignore or circumvent applicable policies, rules or procedures or misappropriation of funds and the theft of proprietary information, including proprietary software. It is not always possible to deter or prevent employee misconduct and the precautions we take to prevent and detect this activity have not been and may not be effective in all cases, as reflected by the settlements relating to 1MDB.
The application of regulatory strategies and requirements in the U.S. and in non-U.S. jurisdictions to facilitate the orderly resolution of large financial institutions could create greater risk of loss for Group Inc.’s security holders.
As described in “Business — Regulation — Banking Supervision and Regulation — Insolvency of an IDI or a BHC,” if the FDIC is appointed as receiver under OLA, the rights of Group Inc.’s creditors would be determined under OLA, and substantial differences exist in the rights of creditors between OLA and the U.S. Bankruptcy Code, including the right of the FDIC under OLA to disregard the strict priority of creditor claims in some circumstances, which could have a material adverse effect on our debtholders.
The FDIC has announced that a single point of entry strategy may be a desirable strategy under OLA to resolve a large financial institution in a manner that would, among other things, impose losses on shareholders, debtholders and other creditors of the top-tier BHC (in our case, Group Inc.), while the BHC’s subsidiaries may continue to operate. It is possible that the application of the single point of entry strategy under OLA, in which Group Inc. would be the only entity to enter resolution proceedings (and its material broker-dealer, bank and other operating entities would not enter resolution proceedings), would result in greater losses to Group Inc.’s security holders (including holders of our fixed rate, floating rate and indexed debt securities), than the losses that would result from the application of a bankruptcy proceeding or a different resolution strategy, such as a multiple point of entry resolution strategy for Group Inc. and certain of its material subsidiaries.
Assuming Group Inc. entered resolution proceedings and support from Group Inc. or other resources available to its subsidiaries was sufficient to enable the subsidiaries to remain solvent, losses at the subsidiary level would be transferred to Group Inc. and ultimately borne by Group Inc.’s security holders, third-party creditors of Group Inc.’s subsidiaries would receive full recoveries on their claims, and Group Inc.’s security holders (including our shareholders, debtholders and other unsecured creditors) could face significant and possibly complete losses. In that case, Group Inc.’s security holders would face losses while the third-party creditors of Group Inc.’s subsidiaries would incur no losses because the subsidiaries would continue to operate and would not enter resolution or bankruptcy proceedings. In addition, holders of Group Inc.’s eligible long-term debt and holders of Group Inc.’s other debt securities could face losses ahead of its other similarly situated creditors in a resolution under OLA if the FDIC exercised its right, described above, to disregard the priority of creditor claims.
OLA also provides the FDIC with authority to cause creditors and shareholders of the financial company in receivership to bear losses before taxpayers are exposed to such losses, and amounts owed to the U.S. government would generally receive a statutory payment priority over the claims of private creditors, including senior creditors.
In addition, under OLA, claims of creditors (including debtholders) could be satisfied through the issuance of equity or other securities in a bridge entity to which Group Inc.’s assets are transferred. If such a securities-for-claims exchange were implemented, there can be no assurance that the value of the securities of the bridge entity would be sufficient to repay or satisfy all or any part of the creditor claims for which the securities were exchanged. While the FDIC has issued regulations to implement OLA, not all aspects of how the FDIC might exercise this authority are known and additional rulemaking is possible.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
In addition, certain jurisdictions, including the U.K. and the E.U., have implemented resolution regimes to provide resolution authorities with the ability to recapitalize a failing entity by writing down its unsecured debt or converting its unsecured debt into equity. Such “bail-in” powers are intended to enable the recapitalization of a failing institution by allocating losses to its shareholders and unsecured debtholders. For example, the Bank of England requires a certain amount of intercompany funding that we provide to our material U.K. subsidiaries to contain a contractual trigger to expressly permit the Bank of England to exercise such “bail-in” powers in certain circumstances. If the intercompany funding we provide to our subsidiaries is “bailed in,” Group Inc.’s claims on its subsidiaries would be subordinated to the claims of the subsidiaries’ third-party creditors or written down. U.S. regulators are considering and non-U.S. authorities have adopted requirements that certain subsidiaries of large financial institutions maintain minimum amounts of total loss-absorbing capacity that would pass losses up from the subsidiaries to the top-tier BHC and, ultimately, to security holders of the top-tier BHC in the event of failure.
The application of Group Inc.’s proposed resolution strategy could result in greater losses for Group Inc.’s security holders.
In our resolution plan, Group Inc. would be resolved under the U.S. Bankruptcy Code. The strategy described in our resolution plan is a variant of the single point of entry strategy: Group Inc. and Goldman Sachs Funding LLC (Funding IHC), a wholly-owned, direct subsidiary of Group Inc., would recapitalize and provide liquidity to certain major subsidiaries, including through the forgiveness of intercompany indebtedness, the extension of the maturities of intercompany indebtedness and the extension of additional intercompany loans. If this strategy were successful, creditors of some or all of Group Inc.’s major subsidiaries would receive full recoveries on their claims, while Group Inc.’s security holders could face significant and possibly complete losses.
To facilitate the execution of our resolution plan, we formed Funding IHC. In exchange for an unsecured subordinated funding note and equity interest, Group Inc. transferred certain intercompany receivables and substantially all of its GCLA to Funding IHC, and agreed to transfer additional GCLA above prescribed thresholds.
We also put in place a Capital and Liquidity Support Agreement (CLSA) among Group Inc., Funding IHC and our major subsidiaries. Under the CLSA, Funding IHC has provided Group Inc. with a committed line of credit that allows Group Inc. to draw sufficient funds to meet its cash needs during the ordinary course of business. In addition, if our financial resources deteriorate so severely that resolution may be imminent, (i) the committed line of credit will automatically terminate and the unsecured subordinated funding note will automatically be forgiven, (ii) all intercompany receivables owed by the major subsidiaries to Group Inc. will be transferred to Funding IHC or their maturities will be extended to five years, (iii) Group Inc. will be obligated to transfer substantially all of its remaining intercompany receivables and GCLA (other than an amount to fund anticipated bankruptcy expenses) to Funding IHC, and (iv) Funding IHC will be obligated to provide capital and liquidity support to the major subsidiaries. Group Inc.’s and Funding IHC’s obligations under the CLSA are secured pursuant to a related security agreement. Such actions would materially and adversely affect Group Inc.’s liquidity. As a result, during a period of severe stress, Group Inc. might commence bankruptcy proceedings at an earlier time than it otherwise would if the CLSA and related security agreement had not been implemented.
If Group Inc.’s proposed resolution strategy were successful, Group Inc.’s security holders could face losses while the third-party creditors of Group Inc.’s major subsidiaries would incur no losses because those subsidiaries would continue to operate and not enter resolution or bankruptcy proceedings. As part of the strategy, Group Inc. could also seek to elevate the priority of its guarantee obligations relating to its major subsidiaries’ derivative contracts or transfer them to another entity so that cross-default and early termination rights would be stayed under the ISDA Protocols, as applicable, which would result in holders of Group Inc.’s eligible long-term debt and holders of Group Inc.’s other debt securities incurring losses ahead of the beneficiaries of those guarantee obligations. It is also possible that holders of Group Inc.’s eligible long-term debt and other debt securities could incur losses ahead of other similarly situated creditors of Group Inc.’s major subsidiaries.
If Group Inc.’s proposed resolution strategy were not successful, Group Inc.’s financial condition would be adversely impacted and Group Inc.’s security holders, including debtholders, may as a consequence be in a worse position than if the strategy had not been implemented. In all cases, any payments to debtholders are dependent on our ability to make such payments and are therefore subject to our credit risk.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
As a result of our recovery and resolution planning processes, including incorporating feedback from our regulators, we may incur increased operational, funding or other costs and face limitations on our ability to structure our internal organization or engage in internal or external activities in a manner that we may otherwise deem most operationally efficient.
Our commodities activities, particularly our physical commodities activities, subject us to extensive regulation and involve certain potential risks, including environmental, reputational and other risks that may expose us to significant liabilities and costs.
As part of our commodities business, we purchase and sell certain physical commodities, arrange for their storage and transport, and engage in market making of commodities. The commodities involved in these activities may include crude oil, refined oil products, natural gas, liquefied natural gas, electric power, agricultural products, base, precious and other metals, minerals (including unenriched uranium), emission credits, coal, freight and related products and indices.
We make investments in and finance entities that engage in the production, storage and transportation of numerous commodities, including many of the commodities referenced above.
These activities subject us and/or the entities in which we invest to extensive and evolving federal, state and local energy, environmental, antitrust and other governmental laws and regulations worldwide, including environmental laws and regulations relating to, among others, air quality, water quality, waste management, transportation of hazardous substances, natural resources, site remediation and health and safety.
There may be substantial costs in complying with current or future laws and regulations relating to our commodities-related activities and investments, which could increase our operating costs and adversely affect the profitability of certain of our investments and activities. Compliance with these laws and regulations requires significant commitments of capital toward environmental and operational monitoring, development of appropriate operational and supervisory procedures and processes, payment of emission fees and carbon or other taxes, and application for, and holding of, permits and licenses.
Commodities involved in our intermediation activities and investments are also subject to the risk of unforeseen or catastrophic events, which are likely to be outside of our control, including those arising from the breakdown or failure of third-party or service providers’ transport vessels, storage facilities or other equipment or processes or other mechanical malfunctions, fires, leaks, spills or release of hazardous substances, performance below expected levels of output or efficiency, terrorist attacks, extreme weather events or other natural disasters or other hostile or catastrophic events. In addition, we rely on third-party suppliers or service providers to perform their contractual obligations and any failure on their part, including the failure to supply or to safely transport or store commodities, could expose us to costs or losses. Also, while we seek to insure against potential risks, we do not have insurance to cover some of these risks and the insurance that we have may be inadequate to cover our losses.
The occurrence of any of such events may prevent us from performing under our agreements with clients, may impair our operations or financial results and may result in litigation, regulatory action, negative publicity or other reputational harm.
Competition
Our results have been and may in the future be adversely affected by the composition of our client base.
Our client base is not the same as that of our major competitors. Some of our businesses have a higher percentage and some have a lower percentage of clients in certain industries or markets than some or all of our competitors. Therefore, unfavorable industry developments or market conditions affecting certain industries or markets have resulted in the past and may result in the future in our businesses underperforming relative to similar businesses of a competitor if our businesses have a higher concentration of clients in such industries or markets. For example, our market-making businesses have a higher percentage of clients with actively managed assets than some of our competitors and these clients have in the past been and may in the future be disproportionately affected by low volatility.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Correspondingly, favorable or simply less adverse developments or market conditions involving industries or markets in a business where we have a lower concentration of clients in that industry or market have also resulted in the past and may result in the future in our underperforming relative to a similar business of a competitor that has a higher concentration of clients in that industry or market. For example, we have a smaller corporate client base in our market-making businesses than some of our peers and therefore those competitors may benefit more from increased activity by corporate clients. Similarly, we have not historically engaged in retail equities intermediation to the same extent as other financial institutions, which has in the past affected and could in the future adversely affect our market share in equities execution.
The financial services industry is highly competitive.
The financial services industry and all of our businesses are intensely competitive, and we expect them to remain so. We compete on the basis of a number of factors, including transaction execution, our products and services, innovation, reputation, creditworthiness and price. There has been substantial consolidation and convergence among companies in the financial services industry. This has hastened the globalization of the securities and other financial services markets. As a result, we have had to commit capital to support our international operations and to execute large global transactions. As we have expanded into new business areas and new geographic regions, we have faced competitors with more experience and more established relationships with clients, regulators and industry participants in the relevant market, which could adversely affect our ability to expand our businesses.
Governments and regulators have adopted regulations, imposed taxes, adopted compensation restrictions or otherwise put forward various proposals that have impacted or may impact our ability to conduct certain of our businesses in a cost-effective manner or at all in certain or all jurisdictions, including proposals relating to restrictions on the type of activities in which financial institutions are permitted to engage. These or other similar rules, many of which do not apply to all our U.S. or non-U.S. competitors, could impact our ability to compete effectively.
Pricing and other competitive pressures in our businesses have continued to increase, particularly in situations where some of our competitors may seek to increase market share by reducing prices. For example, in connection with investment banking and other assignments, in response to competitive pressure we have experienced, we have extended and priced credit at levels that, in some cases, have not fully compensated us for the risks we undertook.
The financial services industry is highly interrelated in that a significant volume of transactions occur among a limited number of members of that industry. Many transactions are syndicated to other financial institutions, and financial institutions are often counterparties in transactions. This has led to claims by other market participants and regulators that such institutions have colluded in order to manipulate markets or market prices, including allegations that antitrust laws have been violated. While we have extensive procedures and controls that are designed to identify and prevent such activities, they may not be effective. Allegations of such activities, particularly by regulators, can have a negative reputational impact and can subject us to large fines and settlements, and potentially significant penalties, including treble damages.
The growth of electronic trading and the introduction of new products and technologies, including trading and distributed ledger technologies, such as cryptocurrencies, and AI technologies, has increased competition.
Technology is fundamental to our business and our industry. The growth of electronic trading and the introduction of new technologies is changing our businesses and presenting us with new challenges. Securities, futures and options transactions are increasingly occurring electronically, both on our own systems and through other alternative trading systems, and it appears that the trend toward alternative trading systems will continue. Some of these alternative trading systems compete with us, particularly with our own alternative trading system and our exchange-based market-making activities, and we may experience continued competitive pressures in these and other areas. In addition, the increased use by our clients of low-cost electronic trading systems and direct electronic access to trading markets has caused and could continue to cause a reduction in commissions and spreads. As our clients increasingly use our systems to trade directly in the markets, we may incur liabilities as a result of their use of our order routing and execution infrastructure.
We have invested significant resources into the development of electronic trading systems and expect to continue to do so, but there is no assurance that the revenues generated by these systems will yield an adequate return, particularly given the generally lower commissions arising from electronic trades.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
In addition, the emergence, adoption and evolution of new technologies, including distributed ledgers, such as digital assets and blockchain, and AI technologies, have required us to invest resources to adapt our existing products and services, and we expect to continue to make such investments, which could be material. The adoption and evolution of such new technologies may also increase our compliance and regulatory costs. Further, new products, platforms and technologies, including stablecoins, digital assets and others based on distributed ledgers, may not require intermediation and could significantly disrupt payments processing and other financial services. Regulatory limitations on our involvement in products and platforms involving digital assets and distributed ledger technologies may not apply equally or, in some cases, at all to certain of our competitors. We may not be as timely or successful in developing or integrating, or even able to develop or integrate, new products and technologies, such as those built on distributed ledgers or AI technologies, into our existing products and services, adapting to changes in client preferences or achieving market acceptance of our products and services. For example, our competitors may be more timely or successful in developing or integrating AI technologies to increase their productivity and reduce their costs or to provide better transaction execution or improved products and services to clients. Any of the foregoing could affect our ability to attract or retain clients, cause us to lose market share or result in service disruptions and in turn reduce our revenues or otherwise adversely affect us.
Our businesses would be adversely affected if we are unable to hire and retain qualified employees.
Our performance is largely dependent on the talents and efforts of highly skilled people; therefore, our continued ability to compete effectively in our businesses, to manage our businesses effectively and to expand into new businesses and geographic areas depends on our ability to attract and retain a talented workforce. Factors that affect our ability to attract and retain such employees include the level and composition of our compensation and benefits, our reputation as a successful business with a culture of fairly hiring, training and promoting qualified employees and government policies, including immigration policy. As a significant portion of the compensation that we pay to our employees is in the form of year-end discretionary compensation, a significant portion of which is in the form of deferred equity-related awards, declines in our profitability, or in the outlook for our future profitability, as well as regulatory limitations on compensation levels and terms, can negatively impact our ability to hire and retain highly qualified employees.
Competition from within the financial services industry and from businesses outside the financial services industry, including the technology industry, for qualified employees has often been intense. We have experienced increased competition in hiring and retaining employees to address the demands of our consumer-oriented businesses and our technology initiatives. This is also the case in emerging and growth markets, where we are often competing for qualified employees with entities that have a significantly greater presence or more extensive experience in the region.
Laws or regulations in jurisdictions in which our operations are located that affect taxes on our employees’ income or the amount or composition of compensation, or that require us to disclose our or our competitors’ compensation practices, may also adversely affect our ability to hire and retain qualified employees in those jurisdictions.
As described further in “Business — Regulation —Compensation Practices” in Part I, Item 1 of this Form 10-K, our compensation practices are subject to review by, and the standards of, the FRB. As a large global financial and banking institution, we are subject to regulation prescribing the structure of compensation (which may or may not affect the companies with which we compete for talent) by the FRB, the FDIC, the PRA, the FCA, the ECB and other regulators worldwide. These limitations have shaped our compensation practices, which has, in some cases, adversely affected our ability to attract and retain talented employees, in particular in relation to companies not subject to these limitations, and future legislation or regulation may have similar adverse effects.
Our operating expenses and efficiency ratio depend, in part, on our overall headcount and the proportion of our employees located in strategic locations. Our future human capital resource requirements and the benefits provided by strategic locations are uncertain, and we may not realize the benefits we anticipate.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Market Developments and General Business Environment
Our businesses, financial condition, liquidity and results of operations have been and may in the future be adversely affected by unforeseen or catastrophic events, including pandemics, terrorist attacks, wars, extreme weather events or other natural disasters.
The occurrence of unforeseen or catastrophic events, including pandemics or other widespread health emergencies (or concerns over the possibility of such an emergency), terrorist attacks, wars, extreme weather events, solar events or other natural disasters, could adversely affect our business, financial condition, liquidity and results of operations. These events could have such effects through economic or financial market disruptions or challenging economic or market conditions more generally, the deterioration of our creditworthiness or that of our counterparties, changes in consumer sentiment and consumer borrowing, spending and savings patterns, liquidity stress, or operational difficulties (such as travel limitations and limitations on occupancy in our offices) that impair our ability to manage our businesses.
Climate-related physical and transition risks could disrupt our businesses and adversely affect client activity levels and the creditworthiness of our clients and counterparties, and we are at increased risk of being subject to conflicting legal and regulatory requirements and stakeholder expectations regarding climate-related matters.
Extreme weather events and the shifts in climate could disrupt operations at one or more of our primary locations, which may negatively affect our ability to service and interact with our clients, adversely affect the value of our investments, including our real estate investments, and reduce the availability or increase the cost of insurance. We are also exposed to risks resulting from changes in public policy, laws and regulations, or market and public perceptions and preferences in connection with the transition to a less carbon-dependent economy, which could adversely affect our business, results of operations and reputation. Both physical risks associated with climate change and risks associated with the transition to a less carbon-dependent economy may also have a negative impact on the operations or financial condition of our clients and counterparties, which may decrease revenues from those clients and counterparties and increase the credit risk associated with loans and other credit exposures to those clients and counterparties.
In addition, due to increasingly divergent policies and viewpoints regarding climate change, we are at increased risk of being subject to conflicting legal and regulatory requirements and stakeholder expectations regarding climate-related matters. See “Business — Regulation — Sustainability and Other” in Part I, Item 1 of this Form 10-K for further information about such regulations.
In the E.U., certain of our entities are expected to be subject in varying degrees to sustainability-related laws being implemented, including directives, such as the CSRD and the CSDDD, which would significantly expand the scope of sustainability disclosure requirements applicable to us and impose stringent due diligence requirements with respect to adverse human rights and environmental impacts. These, as well as any additional or heightened laws, regulations, guidance and expectations, many of which may have broad and extraterritorial application, have in the past subjected and may in the future subject us to different and conflicting requirements and expectations in the various jurisdictions in which we operate, and have in the past resulted in and could in the future result in increased regulatory, compliance or other costs or higher capital requirements. The risks associated with, and the perspective of government officials, regulators, shareholders, employees and other stakeholders regarding, climate change are continuing to evolve rapidly, which makes it difficult to assess the ultimate impact on us of climate change-related risks and uncertainties. In addition, due to divergent stakeholder views relating to climate change, any actual or perceived action, or lack thereof, by us relating to climate change could be perceived negatively by some stakeholders and subject us to criticism, which may adversely affect our business, reputation, and efforts to recruit and retain employees.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Our business, financial condition, liquidity and results of operations have been adversely affected by disruptions in the global economy caused by conflicts, and related sanctions and other developments.
The conflict between Russia and Ukraine has negatively affected the global economy. Governments around the world have responded to Russia’s invasion by imposing economic sanctions and export controls on certain industry sectors, including price caps on Russian oil, and on Russian businesses and persons. Compliance with economic sanctions and restrictions imposed by governments has increased our costs and otherwise adversely affected our business and may continue to do so. Russia has responded with its own restrictions against investors and countries outside Russia and has proposed additional measures aimed at non-Russian owned businesses. Businesses in the U.S. and globally have experienced shortages in materials and increased costs for transportation, energy, and raw materials due in part to the negative effects of the conflict on the global economy.
The conflicts in the Middle East could also affect and harm our business and increase market uncertainty. The impact of these conflicts on our business and operations is uncertain and therefore cannot be predicted.
The escalation or continuation of these conflicts or other hostilities could result in, among other things, an increased risk of cyber attacks, an increased frequency and volume of failures to settle securities transactions, supply chain disruptions, higher inflation, lower consumer demand and increased volatility in commodity, currency and other financial markets. The extent and duration of the conflicts, sanctions and resulting market disruptions are impossible to predict, and the consequences for our business could be significant. If international political instability and geopolitical tensions continue or increase in any region in which we do business, our business and results of operations could be harmed. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Risk Management — Credit Risk Management — Selected Exposures — Country Exposures” for further information about our credit exposure to Russia and Ukraine.
Certain of our businesses and our funding instruments may be adversely affected by changes in reference rates, currencies, indexes, baskets or ETFs to which products we offer or funding that we raise are linked.
Many of the products that we own or that we offer, such as structured notes, warrants, swaps or security-based swaps, pay interest or determine the principal amount to be paid at maturity or in the event of default by reference to rates or by reference to an index, currency, basket, ETF or other financial metric (the underlier). In the event that the composition of the underlier is significantly changed, by reference to rules governing such underlier or otherwise, the underlier ceases to exist (for example, in the event that a country withdraws from the Euro or links its currency to or delinks its currency from another currency or benchmark, an index or ETF sponsor materially alters the composition of an index or ETF, or stocks in a basket are delisted or become impermissible to be included in the index or ETF), the underlier ceases to be recognized as an acceptable market benchmark or there are legal or regulatory constraints on linking a financial instrument to the underlier, we may experience adverse effects.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Our business, financial condition, liquidity and results of operations may be adversely affected by disruptions in the global economy caused by escalating tensions between the U.S. and China.
Continued or escalating tensions between the U.S. and China have resulted in and may result in additional changes to U.S. international trade and investment policies, which could disrupt international trade and investment, adversely affect financial markets, including market activity levels, and adversely impact our revenues. Continued or escalating tensions may also lead to the U.S., China or other countries taking other actions, which could include the implementation of sanctions, tariffs, export controls or foreign exchange measures, the large-scale sale of U.S. Treasury securities or restrictions on cross-border trade, investment or transfer of information or technology. Any such developments could adversely affect our or our clients’ businesses, as well as our financial condition, liquidity and results of operations, possibly materially.
A conflict, or concerns about a potential conflict, involving China and Taiwan, the U.S. or other countries could negatively impact financial markets and our or our clients’ businesses. Trade restrictions by the U.S. or other countries in response to a conflict or potential conflict involving China, including financial and economic sanctions and export controls against certain organizations or individuals, or actions taken by China in response to trade restrictions, could negatively impact our or our clients’ ability to conduct business in certain countries or with certain counterparties and could negatively impact regional and global financial markets and economic conditions. Any of the foregoing could adversely affect our business, financial condition, liquidity and results of operations, possibly materially.
We face enhanced risks as we operate in new locations and transact with a broader array of clients and counterparties.
Our businesses, have in the past brought and may in the future bring us into contact, directly or indirectly, with individuals and entities that are not within our traditional client and counterparty base, expose us to new asset classes and new markets, and present us with integration challenges. For example, we continue to transact business and invest in new regions, including a wide range of emerging and growth markets, and we expect this trend to continue. Various emerging and growth market countries have experienced severe economic and financial disruptions, including significant devaluations of their currencies, defaults or threatened defaults on sovereign debt, capital and currency exchange controls, and low or negative growth rates in their economies. The possible effects of any of these conditions include an adverse impact on our businesses and increased volatility in financial markets generally.
In our consumer-oriented activities, we have faced and continue to face compliance, legal and regulatory risk, increased reputational risk and increased operational risk due to, among other things, higher transaction volumes and significantly increased retention and transmission of consumer and client information. We are also subject to additional legal requirements, including with respect to suitability and consumer protection (for example, Regulation Best Interest, fair lending laws and regulations and privacy laws and regulations). Further, identity fraud may increase and credit reporting practices may change in a manner that makes it more difficult for financial institutions, such as us, to evaluate the creditworthiness of consumers.
In connection with our transaction banking activities, we face compliance, legal and regulatory risk, including with respect to know-your-customer, anti-money laundering and reporting requirements and prohibitions on transfers of property belonging to countries, entities and individuals subject to sanctions by U.S. or other governmental authorities.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
New business initiatives expose us to new and enhanced risks, including risks associated with dealing with governmental entities, reputational concerns arising from dealing with different types of clients, business partners, counterparties and investors, greater regulatory scrutiny of these activities, increased credit-related, market, sovereign and operational risks, risks arising from accidents or acts of terrorism, and reputational concerns with the manner in which certain assets are being operated or held or in which we interact with these clients, business partners, counterparties and investors. Legal, regulatory and reputational risks may also exist in connection with activities and transactions involving new products or markets where there is regulatory uncertainty or where there are different or conflicting regulations depending on the regulator or the jurisdiction involved, particularly where transactions in such products may involve multiple jurisdictions.
We have developed and pursued new business and strategic initiatives, including acquisitions, and expect to continue to do so. If and to the extent we are unable to successfully execute those initiatives, we may incur unanticipated costs and losses, and face other adverse consequences, such as negative reputational effects. In addition, the actual effects of pursuing those initiatives may differ, possibly materially, from the benefits that we expect to realize from them, such as generating additional revenues, achieving expense savings, reducing operational risk exposures or using capital and funding more efficiently. Engaging in new activities exposes us to a variety of risks, including that we may be unable to successfully develop new, competitive, efficient and effective systems and processes, and hire and retain the necessary personnel.
In recent years, we have invested, and may continue to invest, more in businesses that we expect will generate a higher level of more durable revenues. Such investments and acquisitions may not be successful or have returns similar to our other businesses.
We may not be able to fully realize the expected benefits or synergies from acquisitions, joint ventures or other business initiatives in the time frames we expect, or at all.
We have engaged in selective acquisitions and expect to continue to do so in the future and these acquisitions may, individually or in the aggregate, be material to us. In January 2026, we acquired Industry Ventures, through which we intend to expand our offering of venture capital solutions, and in December 2025, we announced an agreement to acquire Innovator Capital Management, through which we intend to expand our ETF offerings. These and any future acquisitions could involve the issuance of common stock and/or the payment of cash as consideration. The success of our acquisitions will depend, in part, on our ability to integrate the acquired businesses and realize anticipated synergies, cost savings and growth opportunities. For example, in 2024, we sold GreenSky Holdings, LLC, which we had previously acquired, and in connection with the disposition we incurred a write-down of intangible assets and goodwill. Also, in 2025 we transitioned the GM credit card program to another issuer and, in 2024, incurred a write-down of intangible assets in connection with that transaction. In any future acquisitions, we may face numerous risks and uncertainties in combining and integrating the relevant businesses and systems, including the need to combine or separate accounting and data processing systems and management controls and to integrate relationships with clients, counterparties, regulators and others in connection with acquisitions. Integration of acquired businesses is time-consuming and could disrupt our ongoing businesses, produce unforeseen regulatory or operating difficulties, cause us to incur incremental expenses or require incremental financial, management and other resources. It is also possible that an acquisition, once announced, may not close due to the failure to satisfy applicable closing conditions, such as the receipt of necessary shareholder or regulatory approvals.
There is no assurance that any of our acquisitions will be successfully integrated or that our acquisitions, joint ventures or other business initiatives will yield all of the expected benefits and synergies in the time frames that we expect, or at all. If we are not able to integrate our acquisitions or execute our joint ventures or other business initiatives successfully, our results of operations, financial condition and cash flows could be adversely affected.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase- losses+8
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MD&A (Item 7)
47,062 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Introduction
The Goldman Sachs Group, Inc. (Group Inc. or parent company), a Delaware corporation, together with its consolidated subsidiaries, is a leading global financial institution that delivers a broad range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, we are headquartered in New York and maintain offices in all major financial centers around the world. We manage and report our activities in three business segments: Global Banking & Markets, Asset & Wealth Management and Platform Solutions. See “Results of Operations” for further information about our business segments.
When we use the terms “we,” “us” and “our,” we mean Group Inc. and its consolidated subsidiaries. When we use the term “our subsidiaries,” we mean the consolidated subsidiaries of Group Inc. References to “this Form 10-K” are to our Annual Report on Form 10-K for the year ended December 31, 2025. All references to “the consolidated financial statements” or “Supplemental Financial Information” are to Part II, Item 8 of this Form 10-K. All references to 2025, 2024 and 2023 refer to our years ended, or the dates, as the context requires, December 31, 2025, December 31, 2024 and December 31, 2023, respectively. Any reference to a future year refers to a year ending on December 31 of that year. Certain reclassifications have been made to previously reported amounts to conform to the current presentation.
Group Inc. is a bank holding company and a financial holding company regulated by the Board of Governors of the Federal Reserve System (FRB).
In this discussion and analysis of our financial condition and results of operations, we have included information that constitutes “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts or statements of current conditions, but instead represent only our beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside our control.
By identifying these statements for you in this manner, we are alerting you to the possibility that our actual results, financial condition, liquidity and capital actions may differ, possibly materially, from the anticipated results, financial condition, liquidity and capital actions in these forward-looking statements. Important factors that could cause our results, financial condition, liquidity and capital actions to differ from those in these statements include, among others, those described in “Risk Factors” in Part I, Item 1A of this Form 10-K and “Forward-Looking Statements” in Part I, Item 1 of this Form 10-K.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
These statements may relate to, among other things, (i) our future plans and results, including our target return on average common shareholders’ equity (ROE), return on average tangible common shareholders’ equity (ROTE), efficiency ratio, Common Equity Tier 1 (CET1) capital ratio, total credit alternative assets, total alternative assets under supervision (AUS), long-term wealth management inflows and percentage growth rate for Management and other fees from alternatives, and how they can be achieved, (ii) trends in or growth opportunities for our businesses, including the timing, costs, profitability, benefits and other aspects of business and strategic initiatives, such as OneGS 3.0, and their impact on our efficiency ratio, (iii) the opportunities and challenges presented by artificial intelligence (AI), (iv) our Investment banking fees backlog and future advisory and capital markets results, (v) expenses we may incur, including the level of future compensation expense, (vi) the projected growth of our deposits and other funding, (vii) our business and expense savings initiatives, including OneGS 3.0, (viii) our planned benchmark debt issuances, (ix) our credit exposures, (x) our expected provision for credit losses and the adequacy of our allowance for credit losses, (xi) the objectives and effectiveness of our business continuity planning (BCP), information security program, risk management and liquidity policies, (xii) our resolution plan and its implications for stakeholders, (xiii) the effect of changes to regulations, and our future status, activities or reporting under banking and financial regulation, (xiv) our expected tax rate, (xv) the future state of our liquidity and regulatory capital ratios, and our prospective capital distributions (including dividends and repurchases), (xvi) our expected stress capital buffer (SCB) and global systemically important bank (G-SIB) surcharge, (xvii) legal proceedings, governmental investigations or other contingencies, (xviii) the asset recovery guarantee and applications for exemptions and authorizations from regulatory authorities related to our 1Malaysia Development Berhad (1MDB) settlements, (xix) the effectiveness of our management of our human capital and changes in headcount, (xx) our sustainability goals, (xxi) future inflation, (xxii) our ability to sell, and the terms of any proposed or pending sales of, Asset & Wealth Management historical principal investments, and our ability to transition the Apple Card program to another issuer, (xxiii) the effectiveness of our cybersecurity risk management process and (xxiv) our completed and announced partnership and acquisitions.
Executive Overview
We generated net earnings of $17.18 billion for 2025, compared with $14.28 billion for 2024. Diluted earnings per common share (EPS) was $51.32 for 2025, compared with $40.54 for 2024. ROE was 15.0% for 2025, compared with 12.7% for 2024. Book value per common share was $357.60 as of December 2025, 6.2% higher compared with December 2024.
Net revenues were $58.28 billion for 2025, 9% higher than 2024, reflecting higher net revenues in Global Banking & Markets, partially offset by significantly lower net revenues in Platform Solutions. The increase in net revenues in Global Banking & Markets primarily reflected significantly higher net revenues in Equities, significantly higher Investment banking fees and higher net revenues in Fixed Income, Currency and Commodities (FICC). The decrease in net revenues in Platform Solutions reflected a reduction in net revenues of $2.26 billion from markdowns on the outstanding credit card portfolio related to the transfer of the Apple Card loan portfolio to held for sale and contract termination obligations in connection with the agreement to transition the program to another issuer, which was more than offset by a related reserve reduction in provision for credit losses. Net revenues in Asset & Wealth Management were slightly higher, reflecting higher Management and other fees, higher net revenues in Private banking and lending and, to a lesser extent, higher Incentive fees, largely offset by significantly lower net revenues in Investments.
Provision for credit losses was a net benefit of $1.11 billion for 2025, compared with net provisions of $1.35 billion for 2024. The net benefit for 2025 reflected a net release related to the Apple Card loan portfolio (including a reserve reduction of $2.48 billion related to the transfer of the Apple Card loans to held for sale, partially offset by net charge-offs during the year). Provisions for 2024 reflected net provisions related to the credit card portfolio (primarily driven by net charge-offs).
Operating expenses were $37.54 billion for 2025, 11% higher than 2024, primarily reflecting higher compensation and benefits expenses (reflecting improved operating performance) and higher transaction based expenses. Our efficiency ratio (total operating expenses divided by total net revenues) was 64.4% for 2025, compared with 63.1% for 2024.
During 2025, we returned a total of $16.78 billion of capital to common shareholders, including $12.36 billion of common share repurchases and $4.42 billion of common stock dividends. As of December 2025, our CET1 capital ratio was 14.3% under the Standardized Capital Rules and 15.1% under the Advanced Capital Rules. See Note 20 to the consolidated financial statements for further information about our capital ratios.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Business Environment
During 2025, the global economy grew, including in the U.S., as economic activity remained resilient despite being impacted by continued inflationary pressures and ongoing geopolitical concerns, as well as uncertainty resulting from changes in international trade policies (including tariffs). These concerns and u ncertainties contributed to periods of market volatility and the prospect of an economic recession in the U.S. during the year. Additionally, markets were focused on the timing and amount of policy interest rate cuts by central banks globally, including three rate cuts by the Federal Reserve in the second half of the year. Global equity prices were generally higher compared with the end of 2024, with some equity indices reaching record highs.
There remains uncertainty and concerns about geopolitical risks, inflation, central bank policies and international trade policies (including tariffs). See “Results of Operations — Segment Assets and Operating Results — Segment Operating Results” for further information about the operating environment for each of our business segments.
Critical Accounting Policy
Fair Value
Fair Value Hierarchy. Trading assets and liabilities, certain investments and loans, and certain other financial assets and liabilities, are included in our consolidated balance sheets at fair value (i.e., marked-to-market), with related gains or losses generally recognized in our consolidated statements of earnings. The use of fair value to measure financial instruments is fundamental to our risk management practices.
The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. We measure certain financial assets and liabilities as a portfolio (i.e., based on its net exposure to market and/or credit risks). In determining fair value, the hierarchy under U.S. generally accepted accounting principles (U.S. GAAP) gives (i) the highest priority to unadjusted quoted prices in active markets for identical, unrestricted assets or liabilities (level 1 inputs), (ii) the next priority to inputs other than level 1 inputs that are observable, either directly or indirectly (level 2 inputs), and (iii) the lowest priority to inputs that cannot be observed in market activity (level 3 inputs). In evaluating the significance of a valuation input, we consider, among other factors, a portfolio’s net risk exposure to that input. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurement.
The fair values for substantially all of our financial assets and liabilities are based on observable prices and inputs and are classified in levels 1 and 2 of the fair value hierarchy. Certain level 2 and level 3 financial assets and liabilities may require appropriate valuation adjustments that a market participant would require to arrive at fair value for factors, such as counterparty and our credit quality, funding risk, transfer restrictions, liquidity and bid/offer spreads.
Instruments classified in level 3 of the fair value hierarchy are those which require one or more significant inputs that are not observable. Level 3 financial assets represented 1.1% as of December 2025 and 1.2% as of December 2024 of our total assets. See Notes 4 and 5 to the consolidated financial statements for further information about level 3 financial assets, including changes in level 3 financial assets and related fair value measurements. Absent evidence to the contrary, instruments classified in level 3 of the fair value hierarchy are initially valued at transaction price, which is considered to be the best initial estimate of fair value. Subsequent to the transaction date, we use other methodologies to determine fair value, which vary based on the type of instrument. Estimating the fair value of level 3 financial instruments requires judgments to be made. These judgments include:
• Determining the appropriate valuation methodology and/or model for each type of level 3 financial instrument;
• Determining model inputs based on an evaluation of all relevant empirical market data, including prices evidenced by market transactions, interest rates, credit spreads, volatilities and correlations; and
• Determining appropriate valuation adjustments, including those related to illiquidity or counterparty credit quality.
Regardless of the methodology, valuation inputs and assumptions are only changed when corroborated by substantive evidence.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Controls Over Valuation of Financial Instruments. Market making and investment professionals in our revenue-producing units are responsible for pricing our financial instruments. Our control infrastructure is independent of the revenue-producing units and is fundamental to ensuring that all of our financial instruments are appropriately valued at market-clearing levels. In the event that there is a difference of opinion in situations where estimating the fair value of financial instruments requires judgment (e.g., calibration to market comparables or trade comparison, as described below), the final valuation decision is made by senior managers in our independent price verification function within Controllers. This independent price verification is critical to ensuring that our financial instruments are properly valued.
Price Verification. All financial instruments at fair value classified in levels 1, 2 and 3 of the fair value hierarchy are subject to our independent price verification process. The objective of price verification is to have an informed and independent opinion with regard to the valuation of financial instruments under review. Instruments that have one or more significant inputs which cannot be corroborated by external market data are classified in level 3 of the fair value hierarchy. Price verification strategies utilized by our independent price verification function within Controllers include:
• Trade Comparison. Analysis of trade data (both internal and external, where available) is used to determine the most relevant pricing inputs and valuations.
• External Price Comparison. Valuations and prices are compared to pricing data obtained from third parties (e.g., brokers or dealers, S&P Global Services, Bloomberg, ICE Data Services, Pricing Direct, TRACE). Data obtained from various sources is compared to ensure consistency and validity. When broker or dealer quotations or third-party pricing vendors are used for valuation or price verification, greater priority is generally given to executable quotations.
• Calibration to Market Comparables. Market-based transactions are used to corroborate the valuation of positions with similar characteristics, risks and components.
• Relative Value Analyses. Market-based transactions are analyzed to determine the similarity, measured in terms of risk, liquidity and return, of one instrument relative to another or, for a given instrument, of one maturity relative to another.
• Collateral Analyses. Margin calls on derivatives are analyzed to determine implied values, which are used to corroborate our valuations.
• Execution of Trades. Where appropriate, market-making desks are instructed to execute trades in order to provide evidence of market-clearing levels.
• Backtesting. Valuations are corroborated by comparison to values realized upon sales.
See Note 4 to the consolidated financial statements for further information about fair value measurements.
Review of Net Revenues. We seek to ensure adherence to our pricing policy through a combination of daily procedures, including the explanation and attribution of net revenues based on the underlying factors. Through this process, we independently validate net revenues, identify and resolve potential fair value or trade booking issues on a timely basis and seek to ensure that risks are being properly categorized and quantified.
Review of Valuation Models. Our independent model risk management group (Model Risk), consisting of quantitative professionals who are separate from model developers, performs an independent model review and validation process of our valuation models. New or changed models are reviewed and approved prior to implementation. Models are reviewed annually to assess the impact of any changes in the product or market and any market developments in pricing theories. See “Risk Management — Model Risk Management” for further information about the review and validation of our valuation models.
Use of Estimates
U.S. GAAP requires us to make certain estimates and assumptions. In addition to the estimates we make in connection with fair value measurements, the use of estimates and assumptions is also important in determining the allowance for credit losses on loans and lending commitments held for investment and accounted for at amortized cost, the accounting for goodwill and identifiable intangible assets, provisions for losses that may arise from litigation and regulatory proceedings (including governmental investigations), and accounting for income taxes.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Allowance for Credit Losses
We estimate and record an allowance for credit losses related to our loans held for investment that are accounted for at amortized cost. To determine the allowance for credit losses, we classify our loans accounted for at amortized cost into wholesale and consumer portfolios. These portfolios represent the level at which we have developed and documented our methodology to determine the allowance for credit losses. The allowance for credit losses is measured on a collective basis for loans that exhibit similar risk characteristics using a modeled approach and on an asset-specific basis for loans that do not share similar risk characteristics. As of December 2025, as a result of transferring our entire credit card portfolio to held for sale, we no longer have any loans in the consumer portfolio that are subject to an allowance for credit losses.
The allowance for credit losses takes into account the weighted average of a range of forecasts of future economic conditions over the expected life of the loans and lending commitments. The expected life of each loan or lending commitment is determined based on the contractual term adjusted for extension options or demand features, or was modeled in the case of revolving credit card loans. The forecasts include multiple economic scenarios over a three-year period. For loans with expected lives beyond three years, the model reverts to historical loss information based on a non-linear modeled approach. We apply judgment in weighting individual scenarios each quarter based on a variety of factors, including our internally derived economic outlook, market consensus, recent macroeconomic conditions and industry trends. The forecasted economic scenarios consider a number of risk factors relevant to the wholesale portfolio and, prior to December 2025, also considered risk factors relevant to the consumer portfolio. Risk factors for wholesale loans include internal credit ratings, industry default and loss data, expected life, macroeconomic indicators (e.g., unemployment rates and GDP), the borrower’s capacity to meet its financial obligations, the borrower’s country of risk and industry, loan seniority and collateral type. In addition, for loans backed by real estate, risk factors include the loan-to-value ratio, debt service ratio and home price index. The allowance for loan losses for wholesale loans that do not share similar risk characteristics, such as nonaccrual loans, is calculated using the present value of expected future cash flows discounted at the loan’s effective interest rate, the observable market price of the loan, or, in the case of collateral dependent loans, the fair value of the collateral less estimated costs to sell, if applicable. Risk factors for credit card loans included Fair Isaac Corporation (FICO) credit scores, delinquency status, loan vintage and macroeconomic indicators.
The allowance for credit losses also includes qualitative components which allow management to reflect the uncertain nature of economic forecasting, capture uncertainty regarding model inputs, and account for model imprecision and concentration risk. The qualitative factors considered by management include, among others, changes and trends in loan portfolios, uncertainties associated with the macroeconomic and geopolitical environments, credit concentrations, changes in volume and severity of past due and criticized loans, idiosyncratic events and deterioration within an industry or region. Our estimate of credit losses entails judgment about collectability at the reporting dates, and there are uncertainties inherent in those judgments. The allowance for credit losses is subject to a governance process that involves senior management within Risk and Controllers. Personnel within Risk are responsible for forecasting the economic variables that underlie the economic scenarios that are used in the modeling of expected credit losses. While we use the best information available to determine this estimate, future adjustments to the allowance may be necessary based on, among other things, changes in the economic environment or variances between actual results and the original assumptions used. Loans are charged off against the allowance for loan losses when deemed to be uncollectible.
We also record an allowance for credit losses on lending commitments which are held for investment that are accounted for at amortized cost. Such allowance is determined using the same methodology as the allowance for loan losses, while also taking into consideration the probability of drawdowns or funding, and whether such commitments are cancellable by us.
To estimate the potential impact of an adverse macroeconomic environment on our allowance for credit losses, we, among other things, compared the expected credit losses under the weighted average forecast used in the calculation of allowance for credit losses as of December 2025 (which was weighted towards the baseline and adverse economic scenarios) to the expected credit losses under a 100% weighted adverse economic scenario. The adverse economic scenario of the forecast model reflects a global recession in the first quarter of 2026 through the fourth quarter of 2026, resulting in an economic contraction and rising unemployment rates. A 100% weighting to the adverse economic scenario would have resulted in an approximate $0.6 billion increase in our allowance for credit losses as of December 2025. This hypothetical increase does not take into consideration any potential adjustments to qualitative reserves. The forecasts of macroeconomic conditions are inherently uncertain and do not take into account any other offsetting or correlated effects. The actual credit loss in an adverse macroeconomic environment may differ significantly from this estimate. See Note 9 to the consolidated financial statements for further information about the allowance for credit losses.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Goodwill
Goodwill is assessed for impairment annually in the fourth quarter or more frequently if events occur or circumstances change that indicate an impairment may exist. When assessing goodwill for impairment, first, a qualitative assessment can be made to determine whether it is more likely than not that the estimated fair value of a reporting unit is less than its carrying value. If the results of the qualitative assessment are not conclusive, a quantitative goodwill test is performed. Alternatively, a quantitative goodwill test can be performed without performing a qualitative assessment. Estimating the fair value of our reporting units requires judgment. Critical inputs to the fair value estimates include projected earnings, allocated equity, price-to-earnings multiples and price-to-book multiples. There is inherent uncertainty in the projected earnings. The carrying value of each reporting unit reflects an allocation of total shareholders’ equity and represents the estimated amount of total shareholders’ equity required to support the activities of the reporting unit under currently applicable regulatory capital requirements. See Note 12 to the consolidated financial statements for further information about our annual assessment of goodwill for impairment. If we experience a prolonged or severe period of weakness in the business environment, financial markets, the performance of one or more of our reporting units or our common stock price, or additional increases in capital requirements, our goodwill could be impaired in the future.
Identifiable Intangible Assets
Identifiable intangible assets are tested for impairment when events or changes in circumstances suggest that an asset’s or asset group’s carrying value may not be fully recoverable. Judgment is required to evaluate whether indications of potential impairment have occurred, and to test identifiable intangible assets for impairment, if required. An impairment is recognized if the estimated undiscounted cash flows relating to the asset or asset group is less than the corresponding carrying value. See Note 12 to the consolidated financial statements for further information about identifiable intangible assets.
Litigation and Regulatory Proceedings
We also estimate and provide for potential losses that may arise out of litigation and regulatory proceedings to the extent that such losses are probable and can be reasonably estimate d. In addition, we estimate the upper end of the range of reasonably possible aggregate loss in excess of the related reserves for litigation and regulatory proceedings where we believe the risk of loss is more than slight. See Notes 18 and 27 to the consolidated financial statements for information about certain judicial, litigation and regulatory proceedings. Significant judgment is required in making these estimates and our final liabilities may ultimately be materially different. Our total estimated liability in respect of litigation and regulatory proceedings is determined on a case-by-case basis and represents an estimate of probable losses after considering, among other factors, the progress of each case, proceeding or investigation, our experience and the experience of others in similar cases, proceedings or investigations, and the opinions and views of legal counsel.
Income Taxes
In accounting for income taxes, we recognize tax positions in the financial statements only when it is more likely than not that the position will be sustained on examination by the relevant taxing authority based on the technical merits of the position. As of December 2025, our liability for unrecognized tax benefits was $2.60 billion. We use estimates to recognize current and deferred income taxes in the U.S. federal, state and local and non-U.S. jurisdictions in which we operate. The income tax laws in these jurisdictions are complex and can be subject to different interpretations between taxpayers and taxing authorities. Disputes may arise over these interpretations and can be settled by audit, administrative appeals or judicial proceedings. We do not expect that the resolution of any such dispute will have a material impact on our financial condition, but it may be material to the operating results for a particular period, depending, in part, on the operating results for that period. Our interpretations are reevaluated quarterly based on guidance currently available, tax examination experience and the opinions of legal counsel, among other factors. We recognize deferred taxes based on the amount that will more likely than not be realized in the future based on enacted income tax laws. As of December 2025, we had $11.39 billion of deferred tax assets with a related valuation allowance of $1.97 billion. Our estimate for deferred taxes includes estimates for future taxable earnings, including the level and character of those earnings, and various tax planning strategies. See Note 24 to the consolidated financial statements for further information about income taxes.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Recent Accounting Developments
See Note 3 to the consolidated financial statements for information about Recent Accounting Developments.
Results of Operations
The composition of our net revenues has varied over time as financial markets and the scope of our operations have changed. The composition of net revenues can also vary over the shorter term due to fluctuations in U.S. and global economic and market conditions. See “Risk Factors” in Part I, Item 1A of this Form 10-K for further information about the impact of economic and market conditions on our results of operations.
Financial Overview
The table below presents an overview of our financial results and selected financial ratios.
Year Ended December
$ in millions, except per share amounts
Net revenues
Pre-tax earnings
Net earnings
Net earnings to common
Diluted EPS
ROE
ROTE
Net earnings to average assets
Return on shareholders’ equity
Average equity to average assets
Dividend payout ratio
Our target (through-the-cycle) is to achieve ROE within a range of 14% to 16% and ROTE within a range of 15% to 17%.
In the table above:
• Net earnings to common represents net earnings applicable to common shareholders, which is calculated as net earnings less preferred stock dividends.
• ROE is calculated by dividing net earnings to common by average monthly common shareholders’ equity.
• ROTE is calculated by dividing net earnings to common by average monthly tangible common shareholders’ equity. Tangible common shareholders’ equity is calculated as total shareholders’ equity less preferred stock, goodwill and identifiable intangible assets. We believe that tangible common shareholders’ equity is meaningful because it is a measure that we and investors use to assess capital adequacy and that ROTE is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed internally. Tangible common shareholders’ equity and ROTE are non-GAAP measures and may not be comparable to similar non-GAAP measures used by other companies.
The table below presents our average equity and the reconciliation of average common shareholders’ equity to average tangible common shareholders’ equity.
Average for the Year Ended December
$ in millions
Total shareholders’ equity
Preferred stock
Common shareholders’ equity
Goodwill
Identifiable intangible assets
Tangible common shareholders’ equity
• Net earnings to average assets is calculated by dividing net earnings by average total assets.
• Return on shareholders’ equity is calculated by dividing net earnings by average shareholders’ equity.
• Average equity to average assets is calculated by dividing average shareholders’ equity by average total assets.
• Dividend payout ratio is calculated by dividing dividends declared per common share by diluted EPS.
Net Revenues
The table below presents our net revenues by line item.
Year Ended December
$ in millions
Investment banking
Investment management
Commissions and fees
Market making
Other principal transactions
Total non-interest revenues
Interest income
Interest expense
Net interest income
Total net revenues
In the table above:
• Investment banking consists of revenues (excluding net interest) from financial advisory and underwriting assignments. These activities are included in Global Banking & Markets.
• Investment management consists of revenues (excluding net interest) from providing asset management and wealth advisory services. These activities are included in Asset & Wealth Management.
• Commissions and fees consists of revenues from executing and clearing client transactions on major stock, options and futures exchanges worldwide, as well as over-the-counter (OTC) transactions. Substantially all of these activities are included in Global Banking & Markets.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
• Market making consists of revenues (excluding net interest) from client execution activities related to making markets in interest rate products, credit products, mortgages, currencies, commodities and equity products. These activities are included in Global Banking & Markets.
• Other principal transactions consists of revenues (excluding net interest) from our investing activities (primarily included in Asset & Wealth Management) and lending activities (primarily included in Global Banking & Markets).
• See Note 25 to the consolidated financial statements for further information about total non-interest revenues and net interest income.
Operating Envir onment. During 2025, the operating environment was generally characterized by ongoing geopolitical tensions and continued broad macroeconomic concerns and uncertainties, including those about inflation, central bank policies and changes in international trade policies (including tariffs). Industry-wide investment banking volumes in completed mergers and acquisitions, equity underwriting and debt underwriting each increased compared with 2024. In market making, activity levels increased compared with the prior year. Additionally, global equity prices were generally higher compared with the end of 2024. In the U.S., the rate of unemployment remained low and the pace of growth in consumer spending declined compared with 2024.
If uncertainty and concerns about geopolitical tensions and the economic outlook remain elevated or increase, including those about inflation, central bank policies and changes in international trade policies, it may lead to a decline in asset prices, a decline in market-making activity levels, or a decline in investment banking activity levels, and net revenues and provision for credit losses would likely be negatively impacted. See “Segment Assets and Operating Results — Segment Operating Results” for information about the operating environment and material trends and uncertainties that may impact our results of operations.
2025 versus 2024 . Net revenues in the consolidated statements of earnings were $58.28 billion for 2025, 9% higher than 2024, reflecting significantly higher net interest income and investment banking revenues, and higher investment management revenues, partially offset by significantly lower other principal transactions revenues.
Non-Interest Revenues. Investment banking revenues in the consolidated statements of earnings were $9.35 billion for 2025, 21% higher than 2024, due to significantly higher revenues in advisory, reflecting a significant increase in completed mergers and acquisitions volumes, and higher revenues in both debt underwriting and equity underwriting.
Investment management revenues in the consolidated statements of earnings were $11.75 billion for 2025, 11% higher than 2024, primarily due to higher management and other fees, primarily reflecting the impact of higher average assets under supervision.
Commissions and fees in the consolidated statements of earnings were $4.04 billion for 2025, essentially unchanged compared with 2024, primarily reflecting a reduction in revenues related to contract termination obligations in connection with the agreement to transition the Apple Card program to another issuer, offset by higher commissions and fees in Equities, reflecting generally higher market volumes and increased transaction fees.
Market making revenues in the consolidated statements of earnings were $17.99 billion for 2025, 2% lower than 2024, reflecting lower net revenues from intermediation activities, partially offset by slightly higher net revenues from financing activities. The decrease from intermediation activities primarily reflected significantly lower revenues in mortgages and currencies, partially offset by significantly higher revenues in equity products and commodities. The increase from financing activities reflected higher revenues in equities financing, partially offset by significantly lower revenues in FICC financing.
Other principal transactions revenues in the consolidated statements of earnings were $1.59 billion for 2025, 66% lower than 2024, primarily reflecting a reduction in revenues related to markdowns on the outstanding credit card portfolio related to the transfer of the Apple Card loan portfolio to held for sale and significantly lower net gains from investments in private equities and derivatives related to our funding activities.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Net Interest Income. Net interest income in the consolidated statements of earnings was $13.56 billion for 2025, 68% higher than 2024, reflecting a decrease in interest expense, partially offset by a decrease in interest income. The decrease in interest expense related to other interest-bearing liabilities, deposits and borrowings (each reflecting the impact of lower average interest rates), partially offset by an increase in interest expense related to trading liabilities (reflecting the impact of higher average balances). The decrease in interest income related to deposits with banks (reflecting the impact of lower average interest rates and lower average balances), other interest-earning assets (reflecting the impact of lower average interest rates), and collateralized agreements (reflecting the impact of lower average balances), partially offset by an increase in interest income related to trading assets and investments (each reflecting the impact of higher average balances). See “Supplemental Financial Information — Statistical Disclosures — Distribution of Assets, Liabilities and Shareholders’ Equity” for further information about our sources of net interest income.
2024 versus 2023 . Net revenues in the consolidated statements of earnings were $53.51 billion for 2024, 16% higher than 2023, primarily reflecting significantly higher other principal transactions revenues, net interest income and investment banking revenues and higher investment management revenues.
Non-Interest Revenues. Investment banking revenues in the consolidated statements of earnings were $7.74 billion for 2024, 24% higher than 2023, primarily reflecting significantly higher revenues in debt underwriting, primarily driven by leveraged finance activity, and in equity underwriting, primarily driven by secondary and initial public offerings. In addition, revenues in advisory were higher, reflecting an increase in completed mergers and acquisitions transactions.
Investment management revenues in the consolidated statements of earnings were $10.60 billion for 2024, 11% higher than 2023, primarily due to higher management and other fees, primarily reflecting the impact of higher average assets under supervision.
Commissions and fees in the consolidated statements of earnings were $4.09 billion for 2024, 8% higher than 2023, due to higher commissions and fees in Equities, reflecting generally higher market volumes and increased transaction fees, partially offset by a reduction in net revenues related to the planned transition of the General Motors (GM) credit card program to another issuer .
Market making revenues in the consolidated statements of earnings were $18.39 billion for 2024, essentially unchanged compared with 2023. Mar ket making revenues from intermediation activities were slightly higher, primarily reflecting significantly higher revenues in equity cash products, currencies and mortgages, offset by significantly lower revenues in commodities and equity derivatives. Market making revenues from financing activities were essentially unchanged, reflecting significantly lower revenues in FICC financing, offset by significantly higher revenues from Equities financing .
Other principal transactions revenues in the consolidated statements of earnings were $4.65 billion for 2024, 119% higher than 2023, primarily reflecting significantly higher net gains from investments in private equities, significantly higher net gains from derivatives related to our funding activities, the impact of the sale of the Marcus loan portfolio in 2023 (including net revenues of approximately $(370) million related to the sale of substantially all of the portfolio) and significantly lower net losses on hedges related to our relationship lending portfolio.
Net Interest Income. Net interest income in the consolidated statements of earnings was $8.06 billion for 2024, 27% higher than 2023, reflecting an increase in interest income, partially offset by an increase in interest expense. The increase in interest income primarily related to trading assets and investments (each reflecting the impact of higher average balances and higher average interest rates), collateralized agreements and other interest-earning assets (each reflecting the impact of higher average interest rates), partially offset by a decrease in interest income related to deposits with banks (reflecting the impact of lower average balances). The increase in interest expense primarily related to collateralized financings and deposits (each reflecting the impact of higher average balances and higher average interest rates) and other interest-bearing liabilities (reflecting the impact of higher average interest rates). See “Supplemental Financial Information — Statistical Disclosures — Distribution of Assets, Liabilities and Shareholders’ Equity” for further information about our sources of net interest income.
Provision for Credit Losses
Provision for credit losses consists of provision for credit losses on financial assets and commitments accounted for at amortized cost, including loans and lending commitments held for investment. See Note 9 to the consolidated financial statements for further information about the provision for credit losses on loans and lending commitments.
The table below presents our provision for credit losses.
Year Ended December
$ in millions
Provision for credit losses
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
2025 versus 2024. Provision for credit losses in the consolidated statements of earnings was a net benefit of $1.11 billion for 2025, compared with net provisions of $1.35 billion for 2024. The net benefit for 2025 reflected a net release related to the Apple Card loan portfolio (including a reserve reduction of $2.48 billion related to the transfer of the Apple Card loans to held for sale, partially offset by net charge-offs during the year). Provisions for 2024 reflected net provisions related to the credit card portfolio (primarily driven by net charge-offs).
2024 versus 2023. Provision for credit losses in the consolidated statements of earnings was $1.35 billion for 2024, compared with $1.03 billion for 2023. Provisions for 2024 reflected net provisions related to the credit card portfolio (primarily driven by net charge-offs). Provisions for 2023 reflected net provisions related to both the credit card portfolio (primarily driven by net charge-offs) and wholesale loans (primarily driven by impairments), partially offset by reserve reductions of $637 million related to the transfer of the GreenSky loan portfolio to held for sale and $442 million related to the sale of substantially all of the Marcus loan portfolio.
Operating Expenses
Our operating expenses are primarily influenced by compensation, headcount and levels of business activity. Compensation and benefits includes salaries, year-end discretionary compensation, amortization of equity awards and other items, such as benefits. Discretionary compensation is significantly impacted by, among other factors, the level of net revenues, net of provision for credit losses, overall financial performance, prevailing labor markets, business mix, the structure of our share-based awards and the external environment.
The table below presents our operating expenses by line item and headcount.
Year Ended December
$ in millions
Compensation and benefits
Transaction based
Market development
Communications and technology
Depreciation and amortization
Occupancy
Professional fees
Other expenses
Total operating expenses
Headcount at period-end
2025 versus 2024. Operating expenses in the consolidated statements of earnings were $37.54 billion for 2025, 11% higher than 2024. Our efficiency ratio was 64.4% for 2025, compared with 63.1% for 2024.
The increase in operating expenses, compared with 2024, primarily reflected higher compensation and benefits expenses (reflecting improved operating performance) and higher transaction based expenses. Net provisions for litigation and regulatory proceedings were $215 million for 2025, compared with $166 million for 2024. In 2025, based on additional information received from the FDIC about the updated estimated cost to the Deposit Insurance Fund resulting from the closures in 2023 of Silicon Valley Bank and Signature Bank, we recognized a reduction of $75 million related to the updated estimated cost of the FDIC special assessment fee, compared with $71 million of expense recognized in 2024.
As of December 2025, headcount increased by 2% compared with December 2024.
In 2025, we recognized severance expense of approximately $250 million, which was largely in connection with headcount reduction initiatives during the year.
During the fourth quarter of 2025, we announced a multi-year initiative, OneGS 3.0, to transform our operating model. We expect that the new operating model will drive expense efficiencies and create capacity for future growth.
2024 versus 2023. Operating expenses in the consolidated statements of earnings were $33.77 billion for 2024, 2% lower than 2023. Our efficiency ratio was 63.1% for 2024, compared with 74.6% for 2023.
Operating expenses, compared with 2023, reflected decreases driven by significantly lower expenses, including impairments ($1.46 billion recognized in 2023), related to commercial real estate in CIEs (largely in depreciation and amortization) and other significant expenses recognized in the prior year, including the write-down of identifiable intangible assets related to GreenSky of $506 million and an impairment of goodwill related to Platform Solutions of $504 million (both in depreciation and amortization), and the FDIC special assessment fee of $529 million (in other expenses). These decreases were partially offset by higher compensation and benefits expenses (reflecting improved operating performance) and higher transaction based expenses. An incremental expense for the FDIC special assessment fee of $71 million was recognized in 2024, as the FDIC notified banks subject to the special assessment fee of the updated estimated cost to the Deposit Insurance Fund resulting from the closures in 2023 of Silicon Valley Bank and Signature Bank. Net provisions for litigation and regulatory proceedings were $166 million for 2024 compared with $115 million for 2023.
As of December 2024, headcount increased 3% compared with December 2023, primarily due to increases in Asset & Wealth Management, Risk and Compliance, partially offset by the impact of the sale of GreenSky.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Provision for Taxes
The effective tax rate for 2025 was 21.4%, down from the full year effective tax rate of 22.4% for 2024, primarily due to an increase in tax benefits on the settlement of employee share-based awards, partially offset by a decrease in the impact of other permanent tax benefits, for 2025 compared with the full year of 2024. The impact of tax benefits related to employee share-based awards was a reduction to provision for taxes for 2025 of approximately $620 million, which reduced our effective tax rate by 2.8 percentage points, and increased our diluted EPS by $1.95 and annualized ROE by 0.5 percentage points.
The Organisation for Economic Co-operation and Development/G20 (OECD/G20) Global Anti-Base Erosion Model Rules (Pillar II Model Rules) aim to ensure that multinationals with revenues in excess of EUR 750 million pay a minimum effective corporate tax rate of 15% (minimum tax) in each jurisdiction in which they operate. The U.K. and other non-U.S. jurisdictions in which we operate have enacted certain portions of the Pillar II Model Rules through domestic legislation (Pillar II legislation). In January 2026, the OECD/G20 released administrative guidance that allows multinationals with a U.S. parent to elect the side-by-side safe harbor. The safe harbor deems certain Pillar II minimum taxes to be zero for tax years beginning on or after January 1, 2026. Certain jurisdictions automatically adopted the safe harbor; however, the majority of jurisdictions that enacted Pillar II legislation will need to adopt the safe harbor into their local laws through legislation or administrative procedures. Domestic minimum top-up taxes still apply under the Pillar II legislation in certain non-U.S. jurisdictions in which we operate. The Pillar II legislation did not have a material impact on our 2025 effective tax rate and is not expected to have a material impact on our 2026 effective tax rate. Any domestic minimum top-up taxes under the Pillar II legislation will be recognized in the period in which they are incurred.
On August 26, 2024, the U.S. Tax Court issued a decision in Varian Medical Systems, Inc. v. Commissioner (Varian decision). The Varian decision reduced the U.S. tax on the deemed repatriation of unremitted foreign earnings of applicable non-U.S. subsidiaries in the transition year of the Tax Cuts and Jobs Act. To date, there have been no significant developments following the Varian decision. We continue to monitor the Varian decision and evaluate its impact, which could be a material income tax benefit, on the deemed repatriation tax we incurred for the 2018 tax year. No income tax benefit has been recognized in the provision for income taxes as a result of the Varian decision as of December 2025.
In July 2025, H.R.1, referred to as the One Big Beautiful Bill Act (OBBBA), was signed into law. OBBBA permanently extends and modifies certain domestic and international provisions from 2017’s Tax Cuts and Jobs Act and phases out certain Inflation Reduction Act of 2022 incentives for investments in clean energy. Certain domestic provisions have retroactive effects beginning in 2025, while the international provisions are generally effective beginning in 2026. The OBBBA legislation did not have a material impact on our 2025 effective tax rate. Beginning in 2026, we expect the effective tax rate to decrease due to OBBBA changes that are expected to reduce the net U.S. tax on international earnings. We expect our 2026 annual effective tax rate to be approximately 20%.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Segment Assets and Operating Results
Beginning with the fourth quarter of 2025, we made certain changes to our segments as we continued to narrow our strategic focus with respect to consumer-related activities within Platform Solutions. Prior periods are presented on a comparable basis. See “Business — Our Business Segments” in Part I, Item 1 of this Form 10-K for further information.
Segment Assets. The table below presents assets by segment.
As of December
$ in millions
Global Banking & Markets
Asset & Wealth Management
Platform Solutions
Total
The allocation process for segment assets is based on the activities of these segments. The allocation of assets includes allocation of GCLA (which consists of unencumbered, highly liquid securities and cash), which is included within cash and cash equivalents, collateralized agreements, trading assets and investments on our balance sheet. Due to the integrated nature of these segments, estimates and judgments are made in allocating these assets. See “Risk Management — Liquidity Risk Management” for further information about our GCLA.
Segment Operating Results. The table below presents our segment operating results.
Year Ended December
$ in millions
Global Banking & Markets
Net revenues
Provision for credit losses
Compensation and benefits expenses
Other operating expenses
Total operating expenses
Pre-tax earnings
Net earnings to common
Average common equity
Return on average common equity
Asset & Wealth Management
Net revenues
Provision for credit losses
Compensation and benefits expenses
Other operating expenses
Total operating expenses
Pre-tax earnings
Net earnings to common
Average common equity
Return on average common equity
Platform Solutions
Net revenues
Provision for credit losses
Compensation and benefits expenses
Other operating expenses
Total operating expenses
Pre-tax earnings/(loss)
Net earnings/(loss) to common
Average common equity
Return on average common equity
Total
Net revenues
Provision for credit losses
Compensation and benefits expenses
Other operating expenses
Total operating expenses
Pre-tax earnings
Net earnings to common
Average common equity
Return on average common equity
Net revenues in our segments include allocations of interest income and interest expense based on the funding generated by, or the funding and liquidity requirements of, the respective segments. See Note 25 to the consolidated financial statements for further information about our business segments.
The allocation of common shareholders’ equity and preferred stock dividends to each segment is based on the estimated amount of equity required to support the activities of the segment under relevant regulatory capital requirements. Net earnings for each segment is calculated by applying the firmwide tax rate to each segment’s pre-tax earnings.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Compensation and benefits expenses within our segments reflect, among other factors, our overall performance, as well as the performance of individual businesses. Consequently, pre-tax margins in one segment of our business may be significantly affected by the performance of our other business segments. A description of segment operating results follows.
Global Banking & Markets
Global Banking & Markets generates revenues from the following:
Investment banking fees. We provide advisory and underwriting services and help companies raise capital to strengthen and grow their businesses. Investment banking fees includes the following:
• Advisory. Includes strategic advisory assignments with respect to mergers and acquisitions, divestitures, corporate defense activities, restructurings and spin-offs.
• Underwriting. Includes public offerings and private placements in both local and cross-border transactions of a wide range of securities and other financial instruments, including acquisition financing.
FICC. FICC generates revenues from intermediation and financing activities.
• FICC intermediation. Includes client execution activities related to making markets in both cash and derivative instruments, as detailed below.
Interest Rate Products. Government bonds (including inflation-linked securities) across maturities, other government-backed securities, and interest rate swaps, options and other derivatives.
Credit Products . Investment-grade and high-yield corporate securities, credit derivatives, exchange-traded funds (ETFs), bank and bridge loans, municipal securities, distressed debt and trade claims.
Mortgages. Commercial mortgage-related securities, loans and derivatives, residential mortgage-related securities, loans and derivatives (including U.S. government agency-issued collateralized mortgage obligations and other securities and loans), and other asset-backed securities, loans and derivatives.
Currencies. Currency options, spot/forwards and other derivatives on G-10 currencies and emerging-market products.
Commodities. Commodity derivatives and, to a lesser extent, physical commodities, involving crude oil and petroleum products, natural gas, agricultural, base, precious and other metals, electricity, including renewable power, environmental products and other commodity products.
• FICC financing. Includes (i) secured lending to our clients through structured mortgage and other asset-backed lending, (ii) financing through securities purchased under agreements to resell (resale agreements) and (iii) other FICC financing (including commodity financing to clients through structured transactions, facilitating institutional primary loans for syndication and providing structured letters of credit to corporate clients).
Equities. Equities generates revenues from intermediation and financing activities.
• Equities intermediation. We make markets in equity and equity-related products, including ETFs, convertible securities, options, futures and OTC derivative instruments. We also structure and make markets in derivatives on indices, industry sectors, financial measures and individual company stocks. Our exchange-based market-making activities include making markets in stocks and ETFs, futures and options on major exchanges worldwide. In addition, we generate commissions and fees from executing and clearing institutional client transactions on major stock, options and futures exchanges worldwide, as well as OTC transactions.
• Equities financing. Includes prime financing, which provides financing to our clients for their securities trading activities through margin loans that are generally collateralized by securities or cash. Prime financing also includes services which involve lending securities to cover institutional clients’ short sales and borrowing securities to cover our short sales and to make deliveries into the market. We are also an active participant in broker-to-broker securities lending and third-party agency lending activities. In addition, we execute swap transactions to provide our clients with exposure to securities and indices. Financing activities also include portfolio financing, which clients can utilize to manage their investment portfolios, and other equity financing activities, including securities-based loans to individuals.
Market-Making Activities
As a market maker, we facilitate transactions in both liquid and less liquid markets, primarily for institutional clients, such as corporations, financial institutions, investment funds and governments, to assist clients in meeting their investment objectives and in managing their risks. In this role, we seek to earn the difference between the price at which a market participant is willing to sell an instrument to us and the price at which another market participant is willing to buy it from us, and vice versa (i.e., bid/offer spread). In addition, we maintain (i) market-making positions, typically for a short period of time, in response to, or in anticipation of, client demand, and (ii) positions to actively manage our risk exposures that arise from these market-making activities (collectively, inventory). Our inventory is recorded in trading assets (long positions) or trading liabilities (short positions) in our consolidated balance sheets.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Our results are influenced by a combination of interconnected drivers, including (i) client activity levels and transactional bid/offer spreads (collectively, client activity), and (ii) changes in the fair value of our inventory and interest income and interest expense related to the holding, hedging and funding of our inventory (collectively, market-making inventory changes). Due to the integrated nature of our market-making activities, disaggregation of net revenues into client activity and market-making inventory changes is judgmental and has inherent complexities and limitations.
The amount and composition of our net revenues vary over time as these drivers are impacted by multiple interrelated factors affecting economic and market conditions, including volatility and liquidity in the market, changes in interest rates, currency exchange rates, credit spreads, equity prices and commodity prices, investor confidence, and other macroeconomic concerns and uncertainties.
In general, assuming all other market-making conditions remain constant, increases in client activity levels or bid/offer spreads tend to result in increases in net revenues, and decreases tend to have the opposite effect. However, changes in market-making conditions can materially impact client activity levels and bid/offer spreads, as well as the fair value of our inventory. For example, a decrease in liquidity in the market could have the impact of (i) increasing our bid/offer spread, (ii) decreasing investor confidence and thereby decreasing client activity levels, and (iii) widening of credit spreads on our inventory positions.
Other. We lend to corporate clients, including through relationship lending and acquisition financing. The hedges related to this lending and financing activity are also reported as part of Other. Additionally, we provide transaction banking services, such as deposit taking, payments solutions and other cash management services, for corporate and institutional clients. Transaction banking revenues include net interest income attributed to transaction banking deposits. Other also includes investing activities related to our Global Banking & Markets activities.
The table below presents our Global Banking & Markets assets.
As of December
$ in millions
Cash and cash equivalents
Collateralized agreements
Customer and other receivables
Trading assets
Investments
Loans
Other assets
Total
The table below presents details about our Global Banking & Markets loans.
As of December
$ in millions
Corporate
Real estate
Securities-based
Other collateralized
Other
Loans, gross
Allowance for loan losses
Total loans
The table below presents our average Global Banking & Markets gross loans.
Year Ended December
$ in millions
Loans
The table below presents our Global Banking & Markets operating results.
Year Ended December
$ in millions
Advisory
Equity underwriting
Debt underwriting
Investment banking fees
FICC intermediation
FICC financing
FICC
Equities intermediation
Equities financing
Equities
Other
Total net revenues
Provision for credit losses
Compensation and benefits expenses
Other operating expenses
Total operating expenses
Pre-tax earnings
Provision for taxes
Net earnings
Preferred stock dividends
Net earnings to common
Average common equity
Return on average common equity
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
The table below presents our FICC and Equities net revenues by line item in the consolidated statements of earnings.
$ in millions
FICC
Equities
Year Ended December 2025
Market making
Commissions and fees
Other principal transactions
Net interest income
Total
Year Ended December 2024
Market making
Commissions and fees
Other principal transactions
Net interest income
Total
Year Ended December 2023
Market making
Commissions and fees
Other principal transactions
Net interest income
Total
In the table above:
• See “Net Revenues” for information about market making revenues, commissions and fees, other principal transactions revenues and net interest income. See Note 25 to the consolidated financial statements for net interest income by segment.
• The primary driver of net revenues for FICC intermediation for all periods was client activity.
• The increase in net interest income across FICC and Equities for 2025 compared with 2024 reflected a decrease in funding costs and an increase in interest-earning assets. Due to the nature of activities within FICC and Equities and the composition of their associated balance sheet, we assess the performance of these businesses based on total net revenues, as offsets can occur across revenue line items. For example, cash instruments that generate interest income are, in some cases, hedged or funded by derivatives for which changes in fair value are reflected in market making revenues. Also, certain activities produce market making revenues but incur interest expense related to the funding of the related inventory.
The table below presents our financial advisory and underwriting transaction volumes.
Year Ended December
$ in billions
Announced mergers and acquisitions
Completed mergers and acquisitions
Equity and equity-related offerings
Debt offerings
In the table above:
• Volumes are per Dealogic.
• Announced and completed mergers and acquisitions volumes are based on full credit to each of the advisors in a transaction. Equity and equity-related and debt offerings are based on full credit for single book managers and equal credit for joint book managers. Transaction volumes may not be indicative of net revenues in a given period. In addition, transaction volumes for prior periods may vary from amounts previously reported due to the subsequent withdrawal or a change in the value of a transaction.
• Equity and equity-related offerings includes Rule 144A and public common stock offerings, convertible offerings and rights offerings.
• Debt offerings includes non-convertible preferred stock, mortgage-backed securities, asset-backed securities and taxable municipal debt. It also includes publicly registered and Rule 144A issues and excludes leveraged loans.
Operating Environmen t. During 2025, Global Banking & Markets operated in an environment generally characterized by ongoing geopolitical tensions and continued broad macroeconomic concerns and uncertainties, including those about inflation, central bank policies and changes in international trade policies (including tariffs).
In investment banking, activity volumes for industry-wide completed mergers and acquisitions, equity underwriting and debt underwriting each increased compared with 2024.
In interest rates, the yield on 10-year U.S. government bonds decreased and the yield on 10-year U.K. government bonds decreased slightly compared with the end of 2024. In equities, the S&P 500 Index increased by 16% and the MSCI World Index increased by 21% compared with the end of 2024.
In the future, if market and economic conditions deteriorate, and market-making activity levels decline or investment banking activity levels decline, or credit spreads related to hedges on our relationship lending portfolio tighten, net revenues in Global Banking & Markets would likely be negatively impacted. In addition, if economic conditions deteriorate or if the creditworthiness of borrowers deteriorates, provision for credit losses would likely be negatively impacted .
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
2025 versus 2024. Net revenues in Global Banking & Markets were $41.45 billion for 2025, 18% higher than 2024.
Investment banking fees were $9.34 billion, 21% higher than 2024, primarily due to significantly higher net revenues in Advisory, reflecting a significant increase in completed mergers and acquisitions volumes. Net revenues in Debt underwriting were higher, reflecting significantly higher net revenues from asset-backed and investment-grade activity. Net revenues in Equity underwriting were also higher, reflecting significantly higher net revenues from initial public and convertible offerings, partially offset by lower net revenues from secondary offerings.
As of December 2025, our Investment banking fees backlog increased significantly compared with the end of 2024, primarily due to significantly higher estimated net revenues from potential advisory transactions and, to a lesser extent, potential debt underwriting transactions.
Our backlog represents an estimate of our net revenues from future transactions where we believe that future revenue realization is more likely than not. We believe changes in our backlog may be a useful indicator of client activity levels which, over the long term, impact our net revenues. However, the time frame for completion and corresponding revenue recognition of transactions in our backlog varies based on the nature of the assignment, as certain transactions may remain in our backlog for longer periods of time. In addition, our backlog is subject to certain limitations, such as assumptions about the likelihood that individual client transactions will occur in the future. Transactions may be cancelled or modified, and transactions not included in the estimate may also occur.
Net revenues in FICC were $14.52 billion, 9% higher than 2024, primarily reflecting higher net revenues in FICC intermediation, due to significantly higher net revenues in interest rate products and slightly higher net revenues in currencies and commodities, partially offset by lower net revenues in mortgages and credit products. The increase also reflected higher net revenues in FICC financing, primarily driven by higher net revenues in mortgages and structured lending.
The increase in FICC intermediation net revenues primarily reflected higher client activity. The following provides information about our FICC intermediation net revenues by business, compared with results for 2024:
• Net revenues in interest rate products primarily reflected the impact of improved market-making conditions on our inventory.
• Net revenues in currencies and commodities reflected higher client activity.
• Net revenues in mortgages and credit products reflected the impact of less favorable market-making conditions on our inventory, partially offset by higher client activity.
Net revenues in Equities were $16.54 billion, 23% higher than 2024, due to significantly higher net revenues in Equities financing, driven by significantly higher net revenues in prime financing and portfolio financing, and higher net revenues in Equities intermediation, primarily driven by higher net revenues in derivatives.
Net revenues in Other were $1.06 billion for 2025, compared with $561 million for 2024, with the increase primarily reflecting significantly higher net revenues from relationship lending activities.
Provision for credit losses was $378 million for 2025, compared with $84 million for 2024. Provisions for 2025 reflected impairments and growth in the wholesale portfolio.
Operating expenses were $23.50 billion for 2025, 15% higher than 2024, primarily due to higher compensation and benefits expenses (reflecting improved operating performance) and significantly higher transaction based expenses. Pre-tax earnings were $17.57 billion for 2025, 21% higher than 2024.
2024 versus 2023. Net revenues in Global Banking & Markets were $35.07 billion for 2024, 17% higher than 2023.
Investment banking fees were $7.73 billion, 24% higher than 2023, primarily reflecting significantly higher net revenues in Debt underwriting, primarily driven by leveraged finance activity, and in Equity underwriting, primarily driven by secondary and initial public offerings. In addition, net revenues in Advisory were higher, reflecting an increase in completed mergers and acquisitions transactions.
As of December 2024, our Investment banking fees backlog increased compared with the end of 2023, primarily reflecting higher estimated net revenues from potential advisory transactions.
Net revenues in FICC were $13.34 billion, 10% higher than 2023, primarily reflecting significantly higher net revenues in FICC financing, primarily driven by mortgages and structured le nding. Net revenues in FICC intermediation were slightly higher, driven by significantly higher net revenues in currencies, mortgages and credit products, largely offset by lower net revenues in interest rate products and significantly lower net revenues in commodities.
The increase in FICC intermediation net revenues reflected the impact of improved market-making conditions on our inventory, partially offset by lower client activity. The following provides information about our FICC intermediation net revenues by business, compared with results for 2023:
• Net revenues in currencies, mortgages and credit products reflected the impact of improved market-making conditions on our inventory.
• Net revenues in interest rate products and commodities primarily reflected lower client activity.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Net revenues in Equities were $13.43 billion, 16% higher than 2023, reflecting significantly higher net revenues in Equities intermediation, primarily driven by derivatives, and higher net revenues in Equities financing, driven by prime financing.
Net revenues in Other were $561 million for 2024, compared with $80 million for 2023, with the increase primarily reflecting significantly lower net losses on hedges.
Provision for credit losses was $84 million for 2024, compared with $430 million for 2023. Provisions for 2023 primarily reflected net provisions related to the commercial real estate portfolio.
Operating expenses were $20.45 billion for 2024, 10% higher than 2023, primarily due to significantly higher transaction based expenses and higher compensation and benefits expenses (reflecting improved operating performance). Pre-tax earnings were $14.53 billion for 2024, 32% higher than 2023.
Asset & Wealth Management
Asset & Wealth Management provides investment services to help clients preserve and grow their financial assets and achieve their financial goals. We provide these services to our clients, both institutional and individuals, including investors who primarily access our products through a network of third-party distributors around the world.
We manage client assets across a broad range of investment strategies and asset classes, including equity, fixed income and alternative investments. We provide investment solutions, including those managed on a fiduciary basis by our portfolio managers, as well as those managed by third-party managers. We offer our investment solutions in a variety of structures, including separately managed accounts, mutual funds, ETFs, private partnerships and other commingled vehicles.
We also provide tailored wealth advisory services, primarily to ultra-high-net worth clients. We operate globally, serving individuals, families, family offices, and foundations and endowments. Our relationships are established directly or introduced through companies that sponsor financial wellness or financial planning programs for their employees, as well as through corporate referrals.
We offer personalized financial planning to individuals and also provide customized investment advisory solutions, and offer structuring and execution capabilities in securities and derivative products across all major global markets. In addition, we offer clients a full range of private banking services, including a variety of deposit alternatives and loans that our clients use to finance investments in both financial and nonfinancial assets, bridge cash flow timing gaps or provide liquidity and flexibility for other needs. We also raise deposits from consumers through Marcus by Goldman Sachs (Marcus).
We invest alongside our clients that invest in investment funds that we raise or manage. We also have investments in alternative assets across a range of asset classes. Our investing activities, which are typically longer-term, include investments in corporate equity, credit, real estate and infrastructure assets.
In September 2025, we announced a strategic collaboration with T. Rowe Price, aimed at delivering a range of diversified public and private market investment solutions designed for the needs of the retirement and wealth markets. As part of this strategic collaboration, we agreed to invest up to $1 billion in T. Rowe Price common stock.
In October 2025, we entered into an agreement to acquire Industry Ventures. The transaction amount consists of $665 million and additional contingent consideration of up to $300 million, payable in both cash and equity, subject to Industry Ventures’ achievement of future performance targets through 2030. This acquisition closed in January 2026.
In December 2025, we entered into an agreement to acquire Innovator Capital Management. The transaction amount consists of approximately $2.0 billion in cash and equity, subject to Innovator Capital Management’s achievement of future performance targets through 2030. The acquisition is expected to close in the second quarter of 2026, subject to regulatory approval and customary closing conditions.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Asset & Wealth Management generates revenues from the following:
• Management and other fees. We receive fees related to managing assets for institutional and individual clients, providing investing and wealth advisory solutions, providing financial planning and counseling services, and executing brokerage transactions for wealth management clients. The vast majority of revenues in management and other fees consists of asset-based fees on client assets that we manage. For further information about assets under supervision, see “Assets Under Supervision” below. The fees that we charge vary by asset class, client channel and the types of services provided, and are affected by investment performance, as well as asset inflows and redemptions.
• Incentive fees. In certain circumstances, we also receive incentive fees based on a percentage of a fund’s or a separately managed account’s return, or when the return exceeds a specified benchmark or other performance targets. Such fees include overrides, which consist of the increased share of the income and gains derived primarily from our private equity and credit funds when the return on a fund’s investments over the life of the fund exceeds certain threshold returns.
• Private banking and lending. Our private banking and lending activities include issuing loans to our wealth management clients. Such loans are generally secured by commercial and residential real estate, securities or other assets. We also raise deposits from wealth management clients through our private bank and Marcus. Private banking and lending revenues include net interest income allocated to deposits and net interest income earned on loans to individual clients.
• Investments. Includes investments related to our asset management activities. These investments include public and private equity securities, debt securities and loans, related to corporate, real estate and infrastructure assets. We also make investments through CIEs, substantially all of which are engaged in real estate investment activities.
The table below presents our Asset & Wealth Management assets.
As of December
$ in millions
Cash and cash equivalents
Collateralized agreements
Customer and other receivables
Trading assets
Investments
Loans
Other assets
Total
The table below presents details about our Asset & Wealth Management loans.
As of December
$ in millions
Corporate
Real estate
Securities-based
Other collateralized
Other
Loans, gross
Allowance for loan losses
Total loans
In the table above, gross loans included $44.70 billion of loans as of December 2025 and $38.30 billion of loans as of December 2024 that were related to Private banking and lending.
The table below presents our average Asset & Wealth Management gross loans.
Year Ended December
$ in millions
Loans
The table below presents our Asset & Wealth Management operating results.
Year Ended December
$ in millions
Management and other fees
Incentive fees
Private banking and lending
Investments
Total net revenues
Provision for credit losses
Compensation and benefits expenses
Other operating expenses
Total operating expenses
Pre-tax earnings
Provision for taxes
Net earnings
Preferred stock dividends
Net earnings to common
Average common equity
Return on average common equity
In the table above, Management and other fees included fees from alternatives of $2.37 billion for 2025, $2.19 billion for 2024 and $2.14 billion for 2023. In 2026, we announced a target to achieve an annual double-digit percentage growth rate for Management and other fees from alternatives.
In 2026, we announced targets to achieve ROE in the high-teens (approximately 17% to 19%) and pre-tax margin of approximately 30% within the medium term (three-to five-year time horizon from year-end 2025) for Asset & Wealth Management. The ROE for Asset & Wealth Management was 12.5% and the pre-tax margin was 25% for 2025. The net impact of historical principal investments and the related attributed equity and the FDIC special assessment fee reduced the ROE for Asset & Wealth Management by approximately 2.3 percentage points.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
The table below presents our Asset management and Wealth management net revenues by line item in Asset & Wealth Management.
$ in millions
Asset management
Wealth management
Asset & Wealth Management
Year Ended December 2025
Management and other fees
Incentive fees
Private banking and lending
Investments
Total
Year Ended December 2024
Management and other fees
Incentive fees
Private banking and lending
Investments
Total
Year Ended December 2023
Management and other fees
Incentive fees
Private banking and lending
Investments
Total
Operating Envi ronment. During 2025, Asset & Wealth Management operated in an environment generally characterized by ongoing geopolitical tensions and continued broad macroeconomic concerns and uncertainties, including those about changes in international trade policies (including tariffs). Global equity prices were generally higher compared with the end of 2024, positively affecting assets under supervision.
In the future, if market and economic conditions deteriorate, it may lead to a decline in asset prices, or investors transitioning to asset classes that typically generate lower fees or withdrawing their assets, and net revenues in Asset & Wealth Management would likely be negatively impacted.
2025 versus 2024. Net revenues in Asset & Wealth Management were $16.68 billion for 2025, 2% higher than 2024, reflecting higher Management and other fees, higher net revenues in Private banking and lending and, to a lesser extent, higher Incentive fees, largely offset by significantly lower net revenues in Investments.
The increase in Management and other fees primarily reflected the impact of higher average assets under supervision. The increase in Private banking and lending net revenues primarily reflected the payment of interest on a previously impaired loan and higher net interest margin from lending. The increase in Incentive fees was primarily driven by performance. The decrease in Investments net revenues primarily reflected significantly lower net gains from investments in private equities and significantly lower net interest income from debt investments due to a reduction in the balance sheet.
Provision for credit losses was a net benefit of $111 million for 2025, compared with a net benefit of $280 million for 2024. The net benefit for both 2025 and 2024 reflected a reserve reduction related to lower balances in the wholesale portfolio.
Operating expenses were $12.66 billion for 2025, 8% higher than 2024 , primarily due to higher compensation and benefits expenses . Pre-tax earnings were $4.13 billion for 2025, 15% lower than 2024.
2024 versus 202 3. Net revenues in Asset & Wealth Management were $16.32 billion for 2024, 15% higher than 2023, primarily reflecting higher Management and other fees and significantly higher net revenues in Investments. In addition, net revenues in Private banking and lending and Incentive fees were higher.
The increase in Management and other fees primarily reflected the impact of higher average assets under supervision. The increase in Investments net revenues primarily reflected significantly higher net gains from investments in private equities (largely reflecting the impact of net losses in real estate investments in the prior year), partially offset by lower net interest income from debt investments due to a reduction in the balance sheet. The increase in Private banking and lending net revenues primarily reflected the impact of the sale of the Marcus loan portfolio in 2023 (including net revenues of approximately $(370) million related to the sale of substantially all of the portfolio) and the impact of higher direct-to-consumer deposit balances. The increase in Incentive fees was driven by harvesting.
Provision for credit losses was a net benefit of $280 million for 2024, compared with a net benefit of $539 million for 2023. The net benefit for 2024 reflected a reserve reduction related to lower balances in the wholesale portfolio. The net benefit for 2023 primarily reflected reserve reductions related to the sale of substantially all of the Marcus loan portfolio and lower balances in corporate loans, partially offset by impairments.
Operating expenses were $11.73 billion for 2024, 10% lower than 2023, due to significantly lower expenses, including impairments, related to commercial real estate in CIEs, partially offset by higher compensation and benefits expenses (reflecting improved operating performance). Pre-tax earnings were $4.87 billion for 2024, compared with $1.76 billion for 2023.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Assets Under Supervision. AUS includes our institutional clients’ assets, assets sourced through third-party distributors and high-net-worth clients’ assets where we earn a fee for managing assets on a discretionary basis. This includes net assets in our mutual funds, ETFs, hedge funds, credit funds, private equity funds, real estate funds, and separately managed accounts for institutional and individual investors. AUS also includes client assets invested with third-party managers, private bank deposits and advisory relationships where we earn a fee for advisory and other services, but do not have investment discretion. AUS does not include the self-directed brokerage assets of our clients.
Beginning in the fourth quarter of 2025, we made the following changes to the classification of our AUS:
• Certain AUS have been reclassified from fixed income to alternative investments to better reflect the underlying investment strategies.
• OCIO (accounts where we are the outsourced chief investment officer of our clients) assets have been reclassified from funds and discretionary accounts to be reported in aggregate with advisory accounts.
• Certain assets have been reclassified from advisory accounts to funds and discretionary accounts to better reflect the investment type of these assets.
In the tables below, prior period amounts have been conformed to the current presentation to reflect the above changes.
The table below presents information about our period-end AUS by asset class, region and vehicle.
As of December
$ in billions
Asset Class
Alternative investments
Equity
Fixed income
Total long-term AUS
Liquidity products
Total AUS
Region
Americas
EMEA
Asia
Total AUS
Vehicle
Separate accounts
Public funds
Private funds and other
Total AUS
In the table above:
• Liquidity products includes money market funds and private bank deposits.
• EMEA represents Europe, Middle East and Africa.
In 2026, we announced a target to grow our total alternative AUS to $750 billion by the end of 2030.
The table below presents our total long-term AUS by client channel.
As of December
$ in billions
Institutional
Wealth management
Third-party distributed
Total long-term AUS
Total wealth management client assets (consisting of AUS, brokerage assets and Marcus deposits) were approximately $1.9 trillion as of December 2025 and approximately $1.6 trillion as of December 2024.
The table below presents changes in our AUS.
Year Ended December
$ in billions
Beginning balance
Net inflows/(outflows):
Alternative investments
Equity
Fixed income
Total long-term AUS net inflows/(outflows)
Liquidity products
Total AUS net inflows/(outflows)
Net market appreciation/(depreciation)
Ending balance
In the table above:
• During 2025, our AUS increased $469 billion due to net market appreciation (primarily in equity and fixed income) and net inflows across all asset classes.
• During 2024, our AUS increased $325 billion due to net inflows across all asset classes (primarily in liquidity products, fixed income and alternative investments) and net market appreciation (primarily in equity).
• During 2023, our AUS increased $265 billion due to net market appreciation (primarily in equity and fixed income) and net inflows (driven by net inflows in fixed income, liquidity products and alternative investments, partially offset by net outflows in equity). Total AUS net inflows/(outflows) for 2023 included outflows of $23 billion related to the sale of Personal Financial Management (PFM).
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
The table below presents information about our total long-term AUS net inflows/(outflows) by client channel.
Year Ended December
$ in billions
Institutional
Wealth management
Third-party distributed
Total long-term AUS net inflows/(outflows)
In 2026, we announced a target to achieve annual long-term fee-based net inflows from the wealth management client channel of approximately 5% of the channel's long-term AUS.
The table below presents information about our average monthly AUS by asset class.
Average for the
Year Ended December
$ in billions
Asset Class
Alternative investments
Equity
Fixed income
Total long-term AUS
Liquidity products
Total AUS
We earn management fees on client assets that we manage and also receive incentive fees based on a percentage of a fund’s or a separately managed account’s return, or when the return exceeds a specified benchmark or other performance targets. These incentive fees are recognized when it is probable that a significant reversal of such fees will not occur. Our estimated unrecognized incentive fees were $5.24 billion as of December 2025, $4.12 billion as of December 2024 and $3.77 billion as of December 2023. Such amounts are based on the completion of the funds’ financial statements, which is generally one quarter in arrears. These fees will be recognized, assuming no decline in fair value, if and when it is probable that a significant reversal of such fees will not occur, which is generally when such fees are no longer subject to fluctuations in the market value of the assets.
The table below presents our average effective management fee (which excludes non-asset-based fees) earned on our AUS by asset class.
Year Ended December
Effective fees (bps)
Alternative investments
Equity
Fixed income
Liquidity products
Total average effective fee
The table below presents details about our monthly average AUS for alternative assets and the average effective management fee we earned on such assets.
Funds & discretionary accounts
Advisory
Total
$ in billions
Direct
strategies
Fund of
funds
Total
& OCIO accounts
alternative AUS
Year Ended December 2025
Average AUS
Corporate equity
Credit
Real estate
Hedge funds and other
Total
Effective Fees (bps)
Corporate equity
Credit
Real estate
Hedge funds and other
Total
Year Ended December 2024
Average AUS
Corporate equity
Credit
Real estate
Hedge funds and other
Total
Effective Fees (bps)
Corporate equity
Credit
Real estate
Hedge funds and other
Total
Year Ended December 2023
Average AUS
Corporate equity
Credit
Real estate
Hedge funds and other
Total
Effective Fees (bps)
Corporate equity
Credit
Real estate
Hedge funds and other
Total
In the table above, direct strategies primarily includes our private equity, growth equity, private credit, liquid alternatives and real estate strategies. Fund of funds primarily includes our business which invests in leading private equity, hedge fund, real estate and credit third-party managers as a limited partner, secondary-market investor, co-investor or management company partner.
In addition to our AUS, we have discretion over alternative investments where we currently do not earn management fees (non-fee-earning alternative assets).
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
The table below presents information about our period-end AUS for alternative assets, non-fee-earning alternative assets and total alternative assets.
AUS
Total
$ in billions
Funds & discretionary
Advisory & OCIO
Total AUS
Non-fee-
earning
alternative
assets
As of December 2025
Corporate equity
Credit
Real estate
Hedge funds and other
Total
As of December 2024
Corporate equity
Credit
Real estate
Hedge funds and other
Total
As of December 2023
Corporate equity
Credit
Real estate
Hedge funds and other
Total
In the table above:
• Substantially all non-fee-earning alternative assets consist of funds and discretionary accounts.
• Corporate equity primarily includes private equity.
• Total alternative assets included uncalled capital that is available for future investing of $70 billion as of December 2025, $64 billion as of December 2024 and $59 billion as of December 2023.
• Non-fee-earning alternative assets primarily includes investments that we hold on our balance sheet, our unfunded commitments, unfunded commitments of our clients (where we do not charge fees on commitments), credit facilities collateralized by fund assets and employee funds. Our calculation of non-fee-earning alternative assets may not be comparable to similar calculations used by other companies.
• Non-fee-earning alternative assets primarily includes our direct investing strategies, including private equity, growth equity, private credit and real estate strategies.
Our target is to grow our total credit alternative assets to $300 billion by the end of 2028.
The table below presents information about third-party commitments raised in our alternatives business from the beginning of 2020 through 2025.
$ in billions
December 2025
Included in AUS
Included in non-fee-earning alternative assets
Third-party commitments raised
In the table above, commitments included in non-fee-earning alternative assets included approximately $81 billion, which will begin to earn fees (and become AUS) if and when the commitments are drawn and assets are invested. In 2025, we raised $115 billion in third-party commitments in our alternatives business, including $48 billion in corporate equity, $34 billion in credit, $8 billion in real estate and $25 billion in hedge funds and other. We have raised $438 billion of third-party commitments in our alternatives business since 2019, and expect to raise between $75 billion and $100 billion annually, subject to market conditions.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
The table below presents information about alternative investments that we hold on our balance sheet.
As of December
$ in billions
Product
Loans
Debt securities
Equity securities
Other
Total
Initiative
Client co-invest
Firmwide initiatives
Historical principal investments
Total
In the table above:
• Other investments include tax credit investments (accounted for under the proportional amortization method of accounting) of $0.7 billion as of December 2025 and $0.6 billion as of December 2024. Additionally, other investments include CIEs, which held assets (generally accounted for at historical cost less depreciation) of $1.2 billion as of December 2025 and $2.3 billion as of December 2024, and were funded with liabilities of approximately $0.6 billion as of December 2025 and approximately $1.1 billion as of December 2024. Substantially all such liabilities were nonrecourse, thereby reducing our equity at risk.
• Client co-invest primarily includes our investments in funds that we raise and manage or where we have invested alongside our clients.
• Firmwide initiatives primarily includes our investments in qualified affordable housing related to the Community Reinvestment Act, as well as investments in renewable energy projects.
• Historical principal investments includes our remaining balance sheet alternative investments portfolio that we plan to reduce. Attributed equity associated with historical principal investments was $2.8 billion as of December 2025.
The table below presents the rollforward of our alternative investments categorized as historical principal investments for 2025.
Historical
principal
$ in billions
investments
Beginning balance
Additions
Dispositions
Ending balance
In the table above, dispositions included approximately $0.1 billion of investments that were primarily transferred from historical principal investments to client co-invest.
The table below presents the concentration of our alternative investments by region and industry.
As of December
$ in billions
Alternative investments
Region
Americas
EMEA
Asia
Total
Industry
Consumer & Retail
Financial Institutions
Healthcare
Industrials
Natural Resources & Utilities
Real Estate
Technology, Media & Telecommunications
Other
Total
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Platform Solutions
Substantially all of the revenues in Platform Solutions are from activities related to issuing credit cards to and raising deposits from Apple Card customers and related to businesses that have been exited. In December 2025, we entered into an agreement to transition the Apple Card program to another issuer. The transition is expected to be completed in approximately 24 months. During 2025, we sold the GM credit card program to another issuer. See “Regulatory and Other Matters — Other Matters — Narrowing our Focus on Consumer-Related Activities” for further information.
The table below presents our Platform Solutions assets.
As of December
$ in millions
Cash and cash equivalents
Collateralized agreements
Customer and other receivables
Trading assets
Investments
Loans
Other assets
Total
In the table above, substantially all loans consisted of credit card loans.
The table below presents our average Platform Solutions gross loans.
Year Ended December
$ in millions
Loans
The table below presents our Platform Solutions operating results.
Year Ended December
$ in millions
Net revenues
Provision for credit losses
Compensation and benefits expenses
Other operating expenses
Total operating expenses
Pre-tax earnings/(loss)
Provision/(benefit) for taxes
Net earnings/(loss)
Preferred stock dividends
Net earnings/(loss) to common
Average common equity
Return on average common equity
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Operating Environm ent. The operating environment for Platform Solutions is mainly impacted by the economic environment in the U.S., which, during 2025, was generally characterized by concerns about inflation and uncertainty related to changes in international trade policies (including tariffs), a continued low rate of unemployment and a decline in the pace of growth in consumer spending compared with 2024.
In the future, if economic conditions deteriorate, it may lead to a decrease in consumer spending or a deterioration in consumer credit, and net revenues in Platform Solutions would likely be negatively impacted.
2025 versus 2024. Net revenue s in Platform Solutions were $151 million for 2025, compared with $2.13 billion in 2024, with the decrease reflecting a reduction in net revenues of $2.26 billion from markdowns on the outstanding credit card portfolio related to the transfer of the Apple Card loan portfolio to held for sale and contract termination obligations in connection with the agreement to transition the program to another issuer, which was more than offset by a related reserve reduction in provision for credit losses.
Provision for credit losses was a net benefit of $1.38 billion for 2025, compared with net provisions of $1.54 billion for 2024. The net benefit for 2025 reflected a reserve reduction of $2.48 billion related to the transfer of the Apple Card loan portfolio to held for sale, partially offset by net charge-offs during the year. Provisions for 2024 reflected net charge-offs related to the credit card portfolio.
Operating expenses were $1.38 billion for 2025, 13% lower than 2024 , primarily reflecting the impact of the sale of GreenSky and the write-down of identifiable intangible assets related to the GM credit card program in the prior year . Pre-tax earnings were $151 million for 2025, compared with a pre-tax loss of $997 million for 2024.
2024 versus 202 3. Net revenues in Platform Solutions were $2.13 billion for 2024, 3% higher than 2023.
Notwithstanding our strategic decision to narrow the focus on consumer-related activities, the increase in net revenues reflected higher average credit card balances and higher average deposit balances, largely offset by a reduction in net revenues related to the planned transition of the GM credit card program to another issuer. See “Regulatory and Other Matters — Other Matters — Narrowing our Focus on Consumer-Related Activities” for further information.
Provision for credit losses was $1.54 billion for 2024, compared with $1.14 billion for 2023. Provisions for 2024 reflected net provisions related to the credit card portfolio (primarily driven by net charge-offs). The net provision for 2023 reflected net provisions related to the credit card portfolio (primarily driven by net charge-offs), partially offset by a net release related to the GreenSky loan portfolio (including a reserve reduction related to the transfer of the portfolio to held for sale).
Operating expenses were $1.58 billion for 2024, 46% lower than 2023, primarily due to the write-down of identifiable intangible assets related to GreenSky and an impairment of goodwill related to Platform Solutions in the prior year. Pre-tax loss was $997 million for 2024, compared with a pre-tax loss of $2.02 billion for 2023.
Geographic Data
See Note 25 to the consolidated financial statements for a summary of our total net revenues, pre-tax earnings and net earnings by geographic region.
Balance Sheet and Funding Sources
Balance Sheet Management
One of our risk management disciplines is our ability to manage the size and composition of our balance sheet. While our asset base changes due to client activity, market fluctuations and business opportunities, the size and composition of our balance sheet also reflects factors, including (i) our overall risk tolerance, (ii) the amount of capital we hold and (iii) our funding profile, among other factors. See “Capital Management and Regulatory Capital — Capital Management” for information about our capital management process.
Although our balance sheet fluctuates on a day-to-day basis, our total assets at quarter-end are generally not materially different from those occurring within our reporting periods.
In order to ensure appropriate risk management, we seek to maintain a sufficiently liquid balance sheet and have processes in place to dynamically manage our assets and liabilities, which include (i) balance sheet planning, (ii) setting balance sheet targets, (iii) monitoring of key metrics and (iv) scenario analyses.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Balance Sheet Planning. We prepare a balance sheet plan that combines our projected total assets and composition of assets with our expected funding sources over a three-year time horizon. This plan is reviewed quarterly and may be adjusted in response to changing business needs or market conditions. The objectives of this planning process are:
• To develop our balance sheet projections, taking into account the general state of the financial markets and expected business activity levels, as well as regulatory requirements;
• To allow Corporate Treasury to set balance sheet targets of our revenue-producing units and evaluate requests to change such targets in the context of our overall balance sheet constraints, including our liability profile and capital levels, and key metrics; and
• To inform the target amount, tenor and type of funding to raise, based on our projected assets and contractual maturities.
Corporate Treasury and Risk, along with our revenue-producing units, review current and prior period information and expectations for the year to prepare our balance sheet plan. The specific information reviewed includes asset and liability size and composition, target utilization, risk and performance measures, and capital usage.
Setting Balance Sheet Targets. We set balance sheet targets to align with our strategic objectives and in consideration of a number of factors, including our risk appetite, our funding plan, our and our subsidiaries' regulatory capital and liquidity requirements, as well as the broader operating environment. The Firmwide Asset Liability Committee has the responsibility to review and approve balance sheet targets at least quarterly. Our balance sheet targets are set at levels which are close to actual operating levels, rather than at levels which reflect our maximum risk appetite, in order to ensure prompt escalation and discussion among our revenue-producing units, Corporate Treasury and Risk. Requests for changes in targets are evaluated after giving consideration to their impact on our key metrics.
Monitoring of Key Metrics. We monitor key balance sheet metrics both by business and on a consolidated basis, including asset and liability size and composition, target utilization and risk measures. We attribute assets to businesses and review and analyze movements resulting from new business activity, as well as market fluctuations.
Scenario Analyses. We conduct various scenario analyses, including as part of preparing our balance sheet plan, Comprehensive Capital Analysis and Review (CCAR), U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act Stress Tests (DFAST) and our recovery and resolution planning. See “Capital Management and Regulatory Capital — Capital Management” for further information about these scenario analyses. These scenarios cover short- and long-term time horizons over a range of economic scenarios, using various macroeconomic and firm-specific assumptions, including those used in our liquidity stress tests. We use these analyses to assist us in developing our longer-term balance sheet management strategy, including the level and composition of assets, funding and capital. Additionally, these analyses help us develop approaches for maintaining appropriate funding, liquidity and capital across a variety of situations, including a severely stressed environment.
Balance Sheet Analysis and Metrics
As of December 2025, total assets in our consolidated balance sheets were $1.81 trillion, an increase of $133.35 billion from December 2024, primarily reflecting increases in trading assets of $86.24 billion (primarily due to increases in equity securities, government and agency obligations and corporate debt, reflecting the impact of our and our clients’ activities), customer and other receivables of $52.13 billion (reflecting our clients’ activities), loans of $41.53 billion (primarily due to increases in other collateralized lending and real estate loans) and investments of $9.75 billion (reflecting a net increase in U.S. government obligations, due to increases in securities accounted for as available-for-sale, partially offset by securities accounted for as held-to-maturity), partially offset by decreases in collateralized agreements of $40.49 billion (reflecting our and our clients’ activities) and cash and cash equivalents of $17.83 billion (primarily reflecting our activities). See "Risk Management — Liquidity Risk Management — Cash Flows" for further information about cash and cash equivalents.
As of December 2025, total liabilities in our consolidated balance sheets were $1.68 trillion, an increase of $130.37 billion from December 2024, primarily reflecting increases in deposits of $68.41 billion (primarily reflecting increases in consumer deposit and other deposit balances), trading liabilities of $60.00 billion (primarily due to increases in equity securities, government and agency obligations and corporate debt, reflecting the impact of our and our clients’ activities), borrowings of $43.62 billion (primarily driven by net issuances) and customer and other payables of $8.61 billion (reflecting our clients’ activities), partially offset by a decrease in collateralized financings of $53.54 billion (reflecting the impact of our and our clients’ activities).
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Our total securities sold under agreements to repurchase (repurchase agreements), accounted for as collateralized financings, as of December 2025 were largely in line with the average daily amount of repurchase agreements during the quarter and the year. Our total repurchase agreements, accounted for as collateralized financings, as of December 2024 were 5% higher than the average daily amount of repurchase agreements during the quarter and 9% higher than the average daily amount of repurchase agreements during the year. These increases relative to the averages resulted from our and our clients’ activities at the end of the period.
The level of our repurchase agreements fluctuates between and within periods, primarily due to providing clients with access to highly liquid collateral, such as certain government and agency obligations, through collateralized financing activities.
The table below presents information about our balance sheet and leverage ratios.
As of December
$ in millions
Total assets
Unsecured long-term borrowings
Total shareholders’ equity
Leverage ratio
Debt-to-equity ratio
In the table above:
• The leverage ratio equals total assets divided by total shareholders’ equity and measures the proportion of equity and debt we use to finance assets. This ratio is different from the leverage ratios included in Note 20 to the consolidated financial statements.
• The debt-to-equity ratio equals unsecured long-term borrowings divided by total shareholders’ equity.
The table below presents information about our shareholders’ equity and book value per common share, including the reconciliation of common shareholders’ equity to tangible common shareholders’ equity.
As of December
$ in millions, except per share amounts
Total shareholders’ equity
Preferred stock
Common shareholders’ equity
Goodwill
Identifiable intangible assets
Tangible common shareholders’ equity
Book value per common share
Tangible book value per common share
In the table above:
• Tangible common shareholders’ equity is calculated as total shareholders’ equity less preferred stock, goodwill and identifiable intangible assets. We believe that tangible common shareholders’ equity is meaningful because it is a measure that we and investors use to assess capital adequacy. Tangible common shareholders’ equity is a non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies.
• Book value per common share and tangible book value per common share are based on common shares outstanding and restricted stock units granted to employees with no future service requirements and not subject to performance or market conditions (collectively, basic shares) of 307.1 million as of December 2025 and 322.9 million as of December 2024. We believe that tangible book value per common share (tangible common shareholders’ equity divided by basic shares) is meaningful because it is a measure that we and investors use to assess capital adequacy. Tangible book value per common share is a non-GAAP measure and may not be comparable to similar non-GAAP measures used by other companies.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Funding Sources
Our primary sources of funding are deposits, collateralized financings, unsecured short- and long-term borrowings, and shareholders’ equity. We seek to maintain broad and diversified funding sources globally across products, programs, markets, currencies and creditors to avoid funding concentrations.
The table below presents information about our funding sources.
As of December
$ in millions
Deposits
Collateralized financings
Unsecured short-term borrowings
Unsecured long-term borrowings
Total shareholders’ equity
Total
Our funding is primarily raised in U.S. dollar, Euro, British pound and Japanese yen. We generally distribute our funding products through our own sales force and third-party distributors to a large, diverse creditor base in a variety of markets in the Americas, Europe and Asia. We believe that our relationships with our creditors are critical to our liquidity. Our creditors include banks, governments, securities lenders, corporations, pension funds, insurance companies, mutual funds and individuals. We have imposed various internal guidelines to monitor creditor concentration across our funding programs.
Deposits. We raise deposits, including savings, demand and time deposits, from consumers, private bank clients, through internal and third-party broker-dealers, transaction banking clients and other institutional clients. Substantially all of our deposits are raised through Goldman Sachs Bank USA (GS Bank USA), Goldman Sachs International Bank (GSIB) and Goldman Sachs Bank Europe SE (GSBE).
The table below presents the types and sources of deposits.
$ in millions
Savings and
Demand
Time
Total
As of December 2025
Consumer
Private bank
Brokered certificates of deposit
Deposit sweep programs
Transaction banking
Other
Total
As of December 2024
Consumer
Private bank
Brokered certificates of deposit
Deposit sweep programs
Transaction banking
Other
Total
In the table above:
• Savings and demand accounts consist of money market deposit accounts, negotiable order of withdrawal accounts and demand deposit accounts that have no stated maturity or expiration date.
• Time deposits had a weighted average maturity of approximately 0.7 years as of December 2025 and approximately 0.6 years as of December 2024.
• Consumer deposits consist of deposits from both Marcus and Apple Card customers.
• Deposit sweep programs include contractual agreements with U.S. broker-dealers who sweep client cash to FDIC-insured deposits.
• Transaction banking deposits consist of deposits that we raised through our cash management services business for corporate and other institutional clients.
• Other deposits are substantially all from institutional clients.
• Deposits insured by the FDIC were $269.63 billion as of December 2025 and $234.54 billion as of December 2024.
• Deposits insured by non-U.S. insurance programs were $31.70 billion as of December 2025 and $25.98 billion as of December 2024.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
See Note 13 to the consolidated financial statements for further information about our deposits, including a maturity profile of our time deposits.
Secured Funding. We fund a significant amount of inventory and a portion of investments on a secured basis. Secured funding includes collateralized financings in the consolidated balance sheets. See Note 11 to the consolidated financial statements for further information about our collateralized financings, including its maturity profile. We may also pledge our inventory and investments as collateral for securities borrowed under a securities lending agreement. We also use our own inventory and investments to cover transactions in which we or our clients have sold securities that have not yet been purchased. Secured funding is less sensitive to changes in our credit quality than unsecured funding, due to our posting of collateral to our lenders. Nonetheless, we analyze the refinancing risk of our secured funding activities, taking into account trade tenors, maturity profiles, counterparty concentrations, collateral eligibility and counterparty rollover probabilities. We seek to mitigate our refinancing risk by executing term trades with staggered maturities, diversifying counterparties, raising excess secured funding and pre-funding residual risk through our GCLA.
We seek to raise secured funding with a term appropriate for the liquidity of the assets that are being financed, and we seek longer maturities for secured funding collateralized by asset classes that may be harder to fund on a secured basis, especially during times of market stress. Our secured funding, excluding funding collateralized by liquid government and agency obligations, is primarily executed for tenors of one month or greater and is primarily executed through term repurchase agreements and securities loaned contracts.
Assets that may be harder to fund on a secured basis during times of market stress include, among other things, mortgage- and other asset-backed loans and securities, non-investment-grade corporate debt securities, equity securities and emerging market securities.
We also have access to and may raise collateralized financings through the Federal Reserve’s standing repurchase agreement (SRP) operations and the Federal Reserve discount window. In addition, GS Bank USA has access to funding from the Federal Home Loan Bank. See Note 11 to the consolidated financial statements for further information about our borrowings from the Federal Home Loan Bank.
Unsecured Short-Term Borrowings. A significant portion of our unsecured short-term borrowings was originally long-term debt that is scheduled to mature within one year of the reporting date. We use unsecured short-term borrowings, including U.S. and non-U.S. hybrid financial instruments and commercial paper, to finance liquid assets and for other cash management purposes. In accordance with regulatory requirements, Group Inc. does not issue debt with an original maturity of less than one year, other than to its subsidiaries. See Note 14 to the consolidated financial statements for further information about our unsecured short-term borrowings.
Unsecured Long-Term Borrowings. Unsecured long-term borrowings, including structured notes, are raised through syndicated U.S. registered offerings, U.S. registered and Rule 144A medium-term note programs, offshore medium-term note offerings and other debt offerings. We issue in different tenors, currencies and products to maximize the diversification of our investor base.
The table below presents our quarterly unsecured long-term borrowings maturity profile.
$ in millions
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter
Total
As of December 2025
2031 - thereafter
Total
The weighted average maturity of our unsecured long-term borrowings as of December 2025 was approximately six years. To mitigate refinancing risk, we seek to limit the principal amount of debt maturing over the course of any monthly, quarterly, semi-annual or annual time horizon. We enter into interest rate swaps to convert a portion of our unsecured long-term borrowings into floating-rate obligations to manage our exposure to interest rates. See Note 14 to the consolidated financial statements for further information about our unsecured long-term borrowings.
Shareholders’ Equity. Shareholders’ equity is a stable and perpetual source of funding. See Note 19 to the consolidated financial statements for further information about our shareholders’ equity.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Capital Management and Regulatory Capital
Capital adequacy is of critical importance to us. We have in place a comprehensive capital management policy that provides a framework, defines objectives and establishes guidelines to assist us in maintaining the appropriate level and composition of capital in both business-as-usual and stressed conditions.
Capital Management
We determine the appropriate amount and composition of our capital by considering multiple factors, including our current and future regulatory capital requirements, the results of our capital planning and stress testing process, the results of resolution capital models and other factors, such as rating agency guidelines, subsidiary capital requirements, the business environment and conditions in the financial markets.
We manage our capital requirements and the levels of our capital usage principally by setting targets on our balance sheet and risk-weighted assets ( RWAs), in each case at both the firmwide and business levels.
We principally manage the level and composition of our capital through issuances and repurchases of our common stock.
We may issue, redeem or repurchase our preferred stock and subordinated debt or other forms of capital as regulatory requirements change and business conditions warrant. Prior to such redemptions or repurchases, we must receive approval from the FRB. See Notes 14 and 19 to the consolidated financial statements for further information about our subordinated debt and preferred stock.
Capital Planning and Stress Testing Process. As part of capital planning, we project sources and uses of capital given a range of business environments, including stressed conditions. Our stress testing process is designed to identify and measure material risks associated with our business activities, including market risk, credit risk, operational risk and liquidity risk, as well as our ability to generate revenues.
Our capital planning process incorporates an internal capital adequacy assessment with the objective of ensuring that we are appropriately capitalized relative to the risks in our businesses. We incorporate stress scenarios into our capital planning process with a goal of holding sufficient capital to ensure we remain adequately capitalized after experiencing a severe stress event. Our assessment of capital adequacy is viewed in tandem with our assessment of liquidity adequacy and is integrated into our overall risk management structure, governance and policy framework.
Our stress tests incorporate our internally designed stress scenarios, including our internally developed severely adverse scenario, and those required by the FRB, and are designed to capture our specific vulnerabilities and risks. We provide further information about our stress test processes and a summary of the results on our website as described in “Business — Available Information” in Part I, Item 1 of this Form 10-K.
As required by the FRB’s CCAR rules, we submit an annual capital plan for review by the FRB. The purpose of the FRB’s review is to ensure that we have a robust, forward-looking capital planning process that accounts for our unique risks and that permits continued operation during times of economic and financial stress.
The FRB evaluates us based, in part, on whether we have the capital necessary to continue operating under the baseline and severely adverse scenarios provided by the FRB and those developed internally. This evaluation also takes into account our process for identifying risk, our controls and governance for capital planning, and our guidelines for making capital planning decisions. In addition, the FRB evaluates our plan to make capital distributions (i.e., dividend payments and repurchases of common stock or redemptions of preferred stock, subordinated debt or other capital securities) and issue capital, across the range of macroeconomic scenarios and firm-specific assumptions. The FRB determines the SCB applicable to us based on its own annual stress test. The SCB under the Standardized approach is calculated as (i) the difference between our starting and minimum projected CET1 capital ratios under the supe rvisory severely adverse scenario and (ii) our planned common stock dividends for each of the fourth through seventh quarters of the planning horizon, expressed as a percentage of RWAs.
See Note 20 to the consolidated financial statements for information about our 2025 CCAR results. See “Share Repurchase Program” for further information about common stock repurchases and dividends. We published a summary of our annual DFAST results in June 2025. See “Business — Available Information” in Part I, Item 1 of this Form 10-K.
GS Bank USA is required to conduct stress tests on an annual basis and publish a summary of certain results. GS Bank USA published a summary of its annual DFAST results in June 2025. See “ Business — Available Information” in Part I, Item 1 of this Form 10-K.
Goldman Sachs International (GSI), GSIB and GSB E also have their own capital planning and stress testing processes, which incorporate internally designed stress tests developed in accordance with the guidelines of their respective regulators.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Contingency Capital Plan. As part of our comprehensive capital management policy, we maintain a contingency capital plan. Our contingency capital plan provides a framework for analyzing and responding to a perceived or actual capital deficiency, including, but not limited to, identification of drivers of a capital deficiency, as well as mitigants and potential actions. It outlines the appropriate communication procedures to follow during a crisis period, including internal dissemination of information, as well as timely communication with external stakeholders.
Capital Attribution. We assess the capital usage of each of our businesses based on our attributed equity framework. This framework considers many factors, including our internal assessment of risks, as well as the regulatory capital requirements related to our business activities.
We review and make any necessary adjustments to our attributed equity in January each year, to reflect, among other things, our most recent stress test results and changes to our regulatory capital requirements. On January 1, 2026, our allocation of attributed equity changed (relative to the allocation as of December 2025) as follows: attributed equity decreased by approximately $0.5 billion for Asset & Wealth Management, while attributed equity increased by approximately $0.4 billion for Global Banking & Markets and approximately $0.1 billion for Platform Solutions. On January 1, 2025, our allocation of attributed equity changed (relative to the allocation as of December 2024) as follows: attributed equity increased by approximately $0.4 billion for Global Banking & Markets, while attributed equity decreased by approximately $0.3 billion for Asset & Wealth Management and approximately $0.1 billion for Platform Solutions. See “Results of Operations — Segment Assets and Operating Results — Segment Operating Results” for information about our average quarterly attributed equity by segment.
Share Repurchase Program. We use our share repurchase program to help maintain the appropriate level of common equity. On an annual basis, we submit a Board of Directors of Group Inc. (Board) approved capital plan to the FRB, which includes planned share repurchases for each quarter. The share repurchases are effected primarily through regular open-market purchases (which may include repurchase plans designed to comply with Rule 10b5-1 and accelerated share repurchases), the amounts and timing of which are determined primarily by our current and projected capital position, and capital deployment opportunities, but which may also be influenced by general market conditions and the prevailing price and trading volumes of our common stock.
In 2025, the Board approved a share repurchase program authorizing repurchases of up to $40 billion of our common stock. The program has no set expiration or termination date. See “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in Part II, Item 5 of this Form 10-K and Note 19 to the consolidated financial statements for further information about our share repurchase program, and see above for information about our capital planning and stress testing process.
During 2025, we returned a total of $16.78 billion of capital to common shareholders, including $12.36 billion of common share repurchases and $4.42 billion of common stock dividends. The Board approved an increase in our quarterly common stock dividend from $4.00 to $4.50 per share beginning in the first quarter of 2026. Consistent with our capital management philosophy, we will continue prioritizing deployment of capital for our clients where returns are attractive and distribute any excess capital to shareholders through dividends and share repurchases, while targeting a 50 to 100 basis point buffer above our capital requirement.
We are subject to a one percent non-deductible federal excise tax (buyback tax) that is applicable to the fair market value of certain corporate share repurchases. The fair market value of share repurchases subject to the tax is reduced by the fair market value of any applicable stock issued during the calendar year, including stock issued to employees.
Resolution Capital Models. In connection with our resolution planning efforts, we have established a Resolution Capital Adequacy and Positioning framework, which is designed to ensure that our major subsidiaries (GS Bank USA, Goldman Sachs & Co. LLC (GS&Co.), GSI, GSIB, GSBE, Goldman Sachs Japan Co., Ltd. (GSJCL), Goldman Sachs Asset Management, L.P. and Goldman Sachs Asset Management International) have access to sufficient loss-absorbing capacity (in the form of equity, subordinated debt and unsecured senior debt) so that they are able to wind down following a Group Inc. bankruptcy filing in accordance with our preferred resolution strategy.
In addition, we have established a triggers and alerts framework, which is designed to provide the Board with information needed to make an informed decision on whether and when to commence bankruptcy proceedings for Group Inc.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Rating Agency Guidelines
The credit rating agencies assign credit ratings to the obligations of Group Inc., which directly issues or guarantees the vast majority of our senior unsecured debt obligations. GS&Co. and GSI have been assigned long- and short-term issuer ratings by certain credit rating agencies. GS Bank USA, GSIB and GSBE have also been assigned long- and short-term issuer ratings, as well as ratings on their long- and short-term bank deposits. In addition, credit rating agencies have assigned ratings to debt obligations of certain other subsidiaries of Group Inc.
The level and composition of our capital are among the many factors considered in determining our credit ratings. Each agency has its own definition of eligible capital and methodology for evaluating capital adequacy, and assessments are generally based on a combination of factors rather than a single calculation. See “Risk Management — Liquidity Risk Management — Credit Ratings” for further information about credit ratings of Group Inc., GS Bank USA, GSIB, GSBE, GS&Co. and GSI.
Consolidated Regulatory Capital
We are subject to consolidated regulatory capital requirements which are calculated in accordance with the regulations of the FRB (Capital Framework). Under the Capital Framework, we are an “Advanced approaches” banking organization and have been designated as a G-SIB. In managing our capital, we consider a number of different capital requirements, the most binding of which can vary over time.
See Note 20 to the consolidated financial statements for further information about our risk-based capital and leverage ratios and the related requirements, and see below for further information about our risk-based capital and RWAs.
G-SIB Surcharge. The capital requirements calculated under the Capital Framework (for both the Standardized and Advanced Rules) include minimum risk-based capital requirements and capital conservation buffer requirements, including the G-SIB surcharge. The G-SIB surcharge is updated annually based on financial data from the prior year and is generally applicable for the following year.
Our G-SIB surcharge (Method 2) was 3.0% for 2025 and is 3.5% for 2026. Based on financial data for 2025, we are in the 4.0% G-SIB surcharge threshold range. The earliest this surcharge could be effective is January 2028. The G-SIB surcharge and countercyclical capital buffer in the future may differ due to additional guidance from our regulators and/or positional changes, and our SCB can change significantly from year to year based on the results of the annual supervisory stress tests. Our target is to maintain capital ratios equal to the regulatory requirements plus a buffer of 50 to 100 basis points.
Risk-Based Capital. The table below presents information about our risk-based capital.
As of December
$ in millions
Common shareholders’ equity
Impact of CECL transition
Deduction for goodwill
Deduction for identifiable intangible assets
Other adjustments
CET1 capital
Preferred stock
Deduction for investments in covered funds
Other adjustments
Tier 1 capital
Standardized Tier 2 and Total capital
Tier 1 capital
Qualifying subordinated debt
Allowance for credit losses
Other adjustments
Standardized Tier 2 capital
Standardized Total capital
Advanced Tier 2 and Total capital
Tier 1 capital
Standardized Tier 2 capital
Allowance for credit losses
Other adjustments
Advanced Tier 2 capital
Advanced Total capital
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
In the table above:
• Beginning in January 2022, we started to phase in the estimated reduction to regulatory capital of $1.11 billion as a result of adopting the Current Expected Credit Losses (CECL) model at 25% per year. As of December 2024, the impact of CECL transition reflected the remaining amount of reduction that was fully phased in on January 1, 2025.
• Deduction for goodwill was net of deferred tax liabilities of $705 million as of December 2025 and $694 million as of December 2024.
• Deduction for identifiable intangible assets was net of deferred tax liabilities of $200 million as of December 2025 and $209 million as of December 2024.
• Deduction for investments in covered funds represents our aggregate investments in applicable covered funds as defined in the Volcker Rule.
• Other adjustments within CET1 capital and Tier 1 capital primarily include credit valuation adjustments (CVAs) on derivative liabilities, the overfunded portion of our defined benefit pension plan obligation net of associated deferred tax liabilities, disallowed deferred tax assets, debt valuation adjustments and other required credit risk-based deductions. Other adjustments within Advanced Tier 2 capital include eligible credit reserves.
• Qualifying subordinated debt is subordinated debt issued by Group Inc. with an original maturity of five years or greater. The outstanding amount of subordinated debt qualifying for Tier 2 capital is reduced upon reaching a remaining maturity of five years. See Note 14 to the consolidated financial statements for further information about our subordinated debt.
The table below presents changes in CET1 capital, Tier 1 capital and Tier 2 capital.
$ in millions
Standardized
Advanced
Year Ended December 2025
CET1 capital
Beginning balance
Change in:
Common shareholders’ equity
Impact of CECL transition
Deduction for goodwill
Deduction for identifiable intangible assets
Other adjustments
Ending balance
Tier 1 capital
Beginning balance
Change in:
CET1 capital
Preferred stock
Deduction for investments in covered funds
Other adjustments
Ending balance
Tier 2 capital
Beginning balance
Change in:
Qualifying subordinated debt
Allowance for credit losses
Other adjustments
Ending balance
Total capital
RWAs. RWAs are calculated in accordance with both the Standardized and Advanced Capital Rules.
Credit Risk
Credit RWAs are calculated based on measures of exposure, which are then risk weighted under the Standardized and Advanced Capital Rules:
• The Standardized Capital Rules apply prescribed risk-weights, which depend largely on the type of counterparty. The exposure measures for derivatives and securities financing transactions are based on specific formulas which take certain factors into consideration.
• Under the Advanced Capital Rules, we compute risk-weights for wholesale and retail credit exposures in accordance with the Advanced Internal Ratings-Based approach. The exposure measures for derivatives and securities financing transactions are computed utilizing internal models.
• For both Standardized and Advanced credit RWAs, the risk-weights for securitizations and equities are based on specific required formulaic approaches.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Market Risk
RWAs for market risk in accordance with the Standardized and Advanced Capital Rules are generally consistent. Market RWAs are calculated based on measures of exposure which include the following:
• Value-at-Risk (VaR) is the potential loss in value of trading assets and liabilities, as well as certain investments, loans, and other financial assets and liabilities accounted for at fair value, due to adverse market movements over a defined time horizon with a specified confidence level.
For both risk management purposes and regulatory capital calculations, we use a single VaR model which captures risks, including those related to interest rates, equity prices, currency rates and commodity prices. However, VaR used for risk management purposes differs from VaR used for regulatory capital requirements (regulatory VaR) due to differences in time horizons, confidence levels and the scope of positions on which VaR is calculated. For risk management purposes, a 95% one-day VaR is used, whereas for regulatory capital requirements, a 99% 10-day VaR is used to determine Market RWAs and a 99% one-day VaR is used to determine regulatory VaR exceptions. In addition, the daily net revenues used to determine risk management VaR exceptions (i.e., comparing the daily net revenues to the VaR measure calculated as of the end of the prior business day) include intraday activity, whereas the Capital Framework requires that intraday activity be excluded from daily net revenues when calculating regulatory VaR exceptions. Intraday activity includes bid/offer net revenues, which are more likely than not to be positive by their nature. As a result, there may be differences in the number of VaR exceptions and the amount of daily net revenues calculated for regulatory VaR compared to the amounts calculated for risk management VaR.
Our positional losses observed on a single day exceeded our 99% one-day regulatory VaR on three occasions during 2025 and on two occasions during 2024. There was no change in our VaR multiplier used to calculate Market RWAs;
• Stressed VaR is the potential loss in value of trading assets and liabilities, as well as certain investments, loans, and other financial assets and liabilities accounted for at fair value, during a period of significant market stress;
• Incremental risk is the potential loss in value of non-securitized positions due to the default or credit migration of issuers of financial instruments over a one-year time horizon;
• Comprehensive risk is the potential loss in value, due to price risk and defaults, within our credit correlation positions; and
• Specific risk is the risk of loss on a position that could result from factors other than broad market movements, including event risk, default risk and idiosyncratic risk. The standardized measurement method is used to determine specific risk RWAs, by applying supervisory defined risk-weighting factors after applicable netting is performed.
Operational Risk
Operational RWAs are only required to be included under the Advanced Capital Rules. We utilize an internal risk-based model to quantify Operational RWAs.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
The table below presents information about RWAs.
$ in millions
Standardized
Advanced
As of December 2025
Credit RWAs
Derivatives
Commitments, guarantees and loans
Securities financing transactions
Equity investments
Other
Total Credit RWAs
Market RWAs
Regulatory VaR
Stressed VaR
Incremental risk
Comprehensive risk
Specific risk
Total Market RWAs
Total Operational RWAs
Total RWAs
As of December 2024
Credit RWAs
Derivatives
Commitments, guarantees and loans
Securities financing transactions
Equity investments
Other
Total Credit RWAs
Market RWAs
Regulatory VaR
Stressed VaR
Incremental risk
Comprehensive risk
Specific risk
Total Market RWAs
Total Operational RWAs
Total RWAs
In the table above:
• Securities financing transactions represents resale and repurchase agreements and securities borrowed and loaned transactions.
• Other includes receivables, certain debt securities, cash and cash equivalents, and other assets.
The table below presents changes in RWAs.
$ in millions
Standardized
Advanced
Year Ended December 2025
RWAs
Beginning balance
Credit RWAs
Change in:
Derivatives
Commitments, guarantees and loans
Securities financing transactions
Equity investments
Other
Change in Credit RWAs
Market RWAs
Change in:
Regulatory VaR
Stressed VaR
Incremental risk
Comprehensive risk
Specific risk
Change in Market RWAs
Change in Operational RWAs
Ending balance
RWAs Rollforward Commentary
Year Ended December 2025. Standardized Credit RWAs as of December 2025 increased by $51.11 billion compared with December 2024, primarily reflecting an increase in commitments, guarantees and loans (principally due to increased lending exposures), an increase in securities financing transactions (principally due to increased funding exposures) and an increase in derivatives (principally due to increased exposures). Standardized Market RWAs as of December 2025 decreased by $12.31 billion compared with December 2024, primarily reflecting a decrease in regulatory and stressed VaR (in each case, principally due to reduced exposures to interest rates and equities).
Advanced Credit RWAs as of December 2025 increased by $43.12 billion compared with December 2024, primarily reflecting an increase in commitments, guarantees and loans (principally due to increased lending exposures), an increase in derivatives (principally due to increased exposures) and an increase in securities financing transactions (principally due to increased funding exposures). Advanced Market RWAs as of December 2025 decreased by $12.31 billion compared with December 2024, primarily reflecting a decrease in regulatory and stressed VaR (in each case, principally due to reduced exposures to interest rates and equities). Advanced Operational RWAs as of December 2025 decreased by $14.15 billion compared with December 2024, reflecting decreased frequency of loss events estimated by our risk-based model.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Total Loss-Absorbing Capacity (TLAC)
We are also subject to the FRB’s TLAC and related requirements. Failure to comply with the TLAC and related requirements would result in restrictions being imposed by the FRB and could limit our ability to repurchase shares, pay dividends and make certain discretionary compensation payments.
The table below presents TLAC and external long-term debt requirements.
As of December
TLAC to RWAs
TLAC to total leverage exposure
External long-term debt to RWAs
External long-term debt to total leverage exposure
In the table above:
• The TLAC to RWAs requirement included (i) the 18% minimum, (ii) the 2.5% buffer, (iii) the countercyclical capital buffer, which the FRB has set to zero percent and (iv) the 1.5% G-SIB surcharge (Method 1).
• The TLAC to total leverage exposure requirement includes (i) the 7.5% minimum and (ii) the 2.0% total leverage exposure buffer.
• The external long-term debt to RWAs requirement includes (i) the 6% minimum and (ii) the 3.0% G-SIB surcharge (Method 2).
• The external long-term debt to total leverage exposure is the 4.5% minimum.
On January 1, 2026, we early adopted the modified Enhanced Supplementary Leverage Ratio standards. See “Business — Regulation” in Part I, Item 1 of this Form 10-K for further information about these standards. As a result, effective January 1, 2026, our TLAC to total leverage exposure requirement decreased to 8.25% and our external long-term debt to total leverage exposure requirement decreased to 3.25%.
Effective January 1, 2026, our G-SIB surcharge (Method 2) increased from 3.0% to 3.5%, resulting in an external long-term debt to RWAs requirement of 9.5%.
The table below presents information about our TLAC and external long-term debt ratios.
For the Three Months
Ended or as of December
$ in millions
TLAC
External long-term debt
RWAs
Total leverage exposure
TLAC to RWAs
TLAC to total leverage exposure
External long-term debt to RWAs
External long-term debt to total leverage exposure
In the table above:
• TLAC includes common and preferred stock, and eligible long-term debt issued by Group Inc. Eligible long-term debt represents unsecured debt, which has a remaining maturity of at least one year and satisfies additional requirements.
• External long-term debt consists of eligible long-term debt subject to a haircut if it is due to be paid between one and two years.
• In accordance with the TLAC rules, the higher of Standardized or Advanced RWAs are used in the calculation of TLAC and external long-term debt ratios and applicable requirements. RWAs represent Standardized RWAs as of both December 2025 and December 2024.
• Total leverage exposure includes average adjusted total assets and the monthly average of off-balance sheet and other exposures, primarily consisting of derivatives, securities financing transactions, commitments and guarantees.
See “Business — Regulation” in Part I, Item 1 of this Form 10-K for further information about TLAC.
Subsidiary Capital Requirements
Many of our subsidiaries, including our bank and broker-dealer subsidiaries, are subject to separate regulation and capital requirements of the jurisdictions in which they operate.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Bank Subsidiaries. GS Bank USA is our primary U.S. banking subsidiary and GSIB and GSBE are our primary non-U.S. banking subsidiaries. These entities are subject to regulatory capital requirements. See Note 20 to the consolidated financial statements for further information about the regulatory capital requirements for GS Bank USA.
• GSIB. GSIB is our U.K. bank subsidiary regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA). GSIB is subject to the U.K. capital framework, which is largely based on the Basel Committee on Banking Supervision’s (Basel Committee) capital framework for strengthening international capital standards (Basel III). The eligible retail deposits of GSIB are covered by the U.K. Financial Services Compensation Scheme to the extent provided by law.
The table below presents GSIB’s risk-based capital requirements.
As of December
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio
The table below presents information about GSIB’s risk-based capital ratios.
As of December
$ in millions
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio
In the table above, the risk-based capital ratios as of December 2025 included profits that are still subject to annual audit by GSIB’s external auditors and approval by GSIB’s Board of Directors for inclusion in risk-based capital. These profits contributed 262 basis points to the CET1 capital ratio as of December 2025.
The table below presents GSIB’s leverage ratio requirement and leverage ratio.
As of December
Leverage ratio requirement
Leverage ratio
In the table above, the leverage ratio as of December 2025 included profits that are still subject to annual audit by GSIB’s external auditors and approval by GSIB’s Board of Directors for inclusion in risk-based capital. These profits contributed 96 basis points to the leverage ratio as of December 2025.
GSIB is subject to minimum reserve requirements at central banks in certain of the jurisdictions in which it operates. As of both December 2025 and December 2024, GSIB was in compliance with these requirements.
• GSBE. GSBE is our German bank subsidiary supervised by the European Central Bank, BaFin and Deutsche Bundesbank. GSBE is a non-U.S. banking subsidiary of GS Bank USA and is also subject to standalone regulatory capital requirements noted below. GSBE is subject to the capital requirements prescribed in the E.U. Capital Requirements Directive (CRD) and E.U. Capital Requirements Regulation (CRR), both of which are largely based on Basel III, and the finalized revisions to the Basel III Capital Requirements set by the Basel Committee (Basel III Revisions), which became effective on January 1, 2025. The deposits of GSBE are covered by the German statutory deposit protection program to the extent provided by law. In addition, GSBE has elected to participate in the German voluntary deposit protection program which provides further insurance for certain eligible deposits beyond the coverage of the German statutory deposit program.
The table below presents GSBE’s risk-based capital requirements.
As of December
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio
The table below presents information about GSBE’s risk-based capital ratios.
As of December
$ in millions
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio
In the table above:
• The risk-based capital ratios decreased from December 2024 to December 2025, primarily reflecting an increase in both Credit RWAs (principally due to the implementation of Basel III Revisions on January 1, 2025) and Market RWAs.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
• The risk-based capital ratios as of December 2025 included profits that are still subject to annual audit by GSBE’s external auditors and approval by GSBE’s shareholder (GS Bank USA) for inclusion in risk-based capital. These profits contributed 76 basis points to the CET1 capital ratio as of December 2025. The risk-based capital ratios as of December 2024 excluded 2024 profits. In the second quarter of 2025, subsequent to the completion of the 2024 annual audit by GSBE’s external auditors, GSBE’s shareholder approved such profits to be included in risk-based capital from June 2025 onwards. These profits would have contributed 151 basis points to the CET1 capital ratio as of December 2024.
The table below presents GSBE’s leverage ratio requirement and leverage ratio.
As of December
Leverage ratio requirement
Leverage ratio
In the table above, the leverage ratio as of December 2025 included profits that are still subject to annual audit by GSBE’s external auditors and approval by GSBE’s shareholder (GS Bank USA) for inclusion in risk-based capital. These profits contributed 41 basis points to the leverage ratio as of December 2025. The leverage ratio as of December 2024 excluded 2024 profits. In the second quarter of 2025, subsequent to the completion of the 2024 annual audit by GSBE’s external auditors, GSBE’s shareholder approved such profits to be included in risk-based capital from June 2025 onwards. These profits would have contributed 54 basis points to the leverage ratio as of December 2024.
GSBE is subject to minimum reserve requirements at central banks in certain of the jurisdictions in which it operates. As of both December 2025 and December 2024, GSBE was in compliance with these requirements.
GSBE is a registered swap dealer with the CFTC and a registered security-based swap dealer with the SEC. As of both December 2025 and December 2024, GSBE was subject to and in compliance with applicable capital requirements for swap dealers and security-based swap dealers.
U.S. Regulated Broker-Dealer Subsidiaries. GS&Co., our primary U.S. regulated broker-dealer subsidiary, is also a registered futures commission merchant and a registered swap dealer with the CFTC, and a registered security-based swap dealer with the SEC, and therefore is subject to regulatory capital requirements imposed by the SEC, the Financial Industry Regulatory Authority, Inc., the CFTC, the Chicago Mercantile Exchange and the National Futures Association. Rule 15c3-1 of the SEC and Rules 1.17 and Part 23 Subpart E of the CFTC specify uniform minimum net capital requirements, as defined, for their registrants, and also effectively require that a significant part of the registrants’ assets be kept in relatively liquid form. GS&Co. has elected to calculate its SEC minimum capital requirements in accordance with the “Alternative Net Capital Requirement” as permitted by Rule 15c3-1 of the SEC.
GS&Co. had regulatory net capital, as defined by Rule 15c3-1 of the SEC, of $23.10 billion as of December 2025 and $21.31 billion as of December 2024, which exceeded the greater of the minimum amounts required under Rule 15c3-1 of the SEC and Rules 1.17 and Part 23 Subpart E of the CFTC by $16.93 billion as of December 2025 and $15.87 billion as of December 2024. In addition to its alternative minimum net capital requirements, GS&Co. is also required to hold tentative net capital in excess of $5 billion and net capital in excess of $1 billion in accordance with Rule 15c3-1. GS&Co. is also required to notify the SEC in the event that its tentative net capital is less than $6 billion. As of both December 2025 and December 2024, GS&Co. had tentative net capital and net capital in excess of both the minimum and the notification requirements.
Non-U.S. Regulated Broker-Dealer Subsidiaries. Our principal non-U.S. regulated broker-dealer subsidiaries include GSI and GSJCL.
GSI, our U.K. broker-dealer, is regulated by the PRA and the FCA. GSI is subject to the U.K. capital framework, which is largely based on Basel III.
The table below presents GSI’s risk-based capital requirements.
As of December
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
The table below presents information about GSI’s risk-based capital ratios.
As of December
$ in millions
CET1 capital
Tier 1 capital
Tier 2 capital
Total capital
RWAs
CET1 capital ratio
Tier 1 capital ratio
Total capital ratio
In the table above, the risk-based capital ratios as of December 2025 included GSI’s profits that are still subject to annual audit by GSI’s external auditors and approval by GSI’s Board of Directors for inclusion in risk-based capital. These profits contributed 17 basis points to the CET1 capital ratio as of December 2025.
The table below presents GSI’s leverage ratio requirement and leverage ratio.
As of December
Leverage ratio requirement
Leverage ratio
In the table above, the leverage ratio as of December 2025 included GSI’s profits that are still subject to annual audit by GSI’s external auditors and approval by GSI’s Board of Directors for inclusion in risk-based capital. These profits contributed 7 basis points to the leverage ratio as of December 2025.
GSI is a registered swap dealer with the CFTC and a registered security-based swap dealer with the SEC. As of both December 2025 and December 2024, GSI was subject to and in compliance with applicable capital requirements for swap dealers and security-based swap dealers.
GSJCL, our Japanese broker-dealer, is regulated by Japan’s Financial Services Agency. GSJCL and certain other non-U.S. subsidiaries are also subject to capital requirements promulgated by authorities of the countries in which they operate. As of both December 2025 and December 2024, these subsidiaries were in compliance with their local capital requirements.
Regulatory and Other Matters
Regulatory Matters
Our businesses are subject to extensive regulation and supervision worldwide. Regulations have been adopted or are being considered by regulators and policy makers worldwide. Given that many of the new and proposed rules are highly complex, the full impact of regulatory reform will not be known until the rules are implemented and market practices develop under the final regulations.
See “Business — Regulation” in Part I, Item 1 of this Form 10-K for further information about the laws, rules and regulations and proposed laws, rules and regulations that apply to us and our operations.
Other Matters
Narrowing our Focus on Consumer-Related Activities. Since 2023, we have narrowed our focus with respect to consumer-related activities by taking the following actions:
• We completed the sale of substantially all of the Marcus loan portfolio in 2023 (included within Asset & Wealth Management).
• We sold our PFM business in 2023 (included within Asset & Wealth Management).
• We sold the majority of the GreenSky loan portfolio in 2023 and, during 2024, completed the sale of GreenSky (included within Platform Solutions).
• During 2024, we sold our seller financing loan portfolio (included within Platform Solutions). This portfolio consisted of loans that were extended to small- and medium-sized retailers.
• During 2025, we sold the GM credit card program (included within Platform Solutions) to another issuer.
• In December 2025, we entered into an agreement to transition the Apple Card program (included within Platform Solutions) to another issuer. The transition is expected to be completed in approximately 24 months. Until this transition is completed, we will continue to operate the program to support the products and service our customers.
These transactions have substantially completed the narrowing of our focus on our consumer-related activities.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
The table below presents the impact to pre-tax earnings of the items that we sold or have announced the decision to sell (with respect to the narrowing of our focus on consumer-related activities).
Year Ended December
$ in millions
Apple Card program
GM credit card program
GreenSky
Marcus loan portfolio
PFM
Seller financing loan portfolio
Total
In the table above, pre-tax earnings related to the Apple Card program, GreenSky, the GM credit card program and the seller financing loan portfolio were included within Platform Solutions, and the pre-tax earnings related to the Marcus loan portfolio and PFM were included within Asset & Wealth Management.
See “Results of Operations — Platform Solutions” for the drivers of changes in our net revenues.
Off-Balance Sheet Arrangements
In the ordinary course of business, we enter into various types of off-balance sheet arrangements, including providing guarantees, indemnifications, commitments, letters of credit and representations and warranties, holding variable interests in non-consolidated entities, purchasing or retaining interests in securitization vehicles and entering into derivatives.
We enter into these arrangements for a variety of business purposes, including those that are critical to the functioning of several significant investor markets, including the mortgage-backed and other asset-backed securities markets.
The table below presents where information about our various off-balance sheet arrangements may be found in this Form 10-K. In addition, see Note 3 to the consolidated financial statements for information about our consolidation policies.
Off-Balance Sheet Arrangement
Disclosure in Form 10-K
Variable interests in nonconsolidated variable interest entities
See Note 17 to the consolidated financial statements.
Guarantees, and lending and other commitments
See Note 18 to the consolidated financial statements.
Derivatives
See Note 7 to the consolidated financial statements.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Risk Management
Risks are inherent in our businesses and include liquidity, market, credit, operational, cybersecurity, model, legal, compliance, conduct, regulatory and reputational risks. For further information about our risk management processes, see “Overview and Structure of Risk Management,” and for information about our areas of risk, see “Liquidity Risk Management,” “Market Risk Management,” “Credit Risk Management,” “Operational Risk Management,” “Cybersecurity Risk Management,” “Model Risk Management” and “Other Risk Management,” as well as “Risk Factors” in Part I, Item 1A of this Form 10-K.
Overview and Structure of Risk Management
Overview
Effective risk management is critical to our success. Accordingly, we have established an enterprise risk management framework that employs a comprehensive, integrated approach to risk management and is designed to enable comprehensive risk management processes through which we identify, assess, monitor and manage the risks we assume in conducting our activities. Our risk management structure is built around three core components: governance, processes and people.
Governance. Our Board is responsible for overseeing our approach to managing our most significant risks, both directly and through its committees, including its Risk Committee. As part of this oversight, the Board reviews our enterprise risk management framework, as well as our risk appetite statement. The risk appetite statement describes the levels and types of risk we are willing to accept or to avoid in order to achieve our objectives included in our strategy and business plan, while remaining in compliance with regulatory requirements. In addition, the Board reviews our strategy and business plan and is ultimately responsible for overseeing and providing direction about our strategy.
The Board, including through its committees, receives regular briefings on firmwide risks, including liquidity risk, market risk, credit risk, operational risk, model risk and climate risk, from our chief risk officer, on cybersecurity threats and risks from our chief information security officer (CISO), on compliance risk and conduct risk from our chief compliance officer, on legal and regulatory enforcement matters from our chief legal officer, and on other matters impacting our reputation from the chair and/or vice-chairs of our Firmwide Reputational Risk Committee, as well as other members of senior management.
The chief risk officer reports to our chief executive officer and to the Risk Committee of the Board. As part of the review of the firmwide risk portfolio, the chief risk officer regularly advises the Risk Committee of the Board of relevant risk metrics and material exposures, including risk limits and thresholds established in our risk appetite statement.
Enterprise Risk, which reports to our chief risk officer, is responsible for ensuring that our enterprise risk management framework provides the Board and its committees, our risk committees and senior management with a consistent and integrated approach to managing our various risks in a manner consistent with our risk appetite.
Our first line of defense consists of our revenue-producing units, Conflicts Resolution, Controllers, Engineering, Corporate Treasury and certain other corporate functions. The first line of defense is responsible for its risk-generating activities, as well as for the design and execution of controls to mitigate such risks.
Our Risk and Compliance functions are considered our second line of defense and provide independent assessment, review and challenge of the risks taken by our first line of defense, as well as lead and participate in firmwide risk committees.
Internal Audit is considered our third line of defense, and our director of Internal Audit reports to the Audit Committee of the Board and administratively to our chief executive officer. Internal Audit includes professionals with a broad range of audit and industry experience, including risk management expertise. Internal Audit is responsible for independently assessing and validating the effectiveness of key controls, including those within the risk management framework, and providing timely reporting to the Audit Committee of the Board, senior management and regulators.
The three lines of defense structure promotes the accountability of first line risk takers, provides a framework for effective challenge by the second line and empowers independent review from the third line.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Processes. We maintain various processes that are critical components of our risk management framework, including (i) risk identification and assessment, (ii) risk appetite, limits, thresholds and alerts, (iii) control monitoring and testing, and (iv) risk reporting.
• Risk Identification and Assessment. We believe the identification and assessment of our risks is a critical step in providing our Board and senior management transparency and insight into the range and materiality of our risks. We have a comprehensive data collection process, including firmwide policies and procedures that require all employees to report and escalate risk events. Our approach for risk identification and assessment is comprehensive across all risk types, is dynamic and forward-looking to reflect and adapt to our changing risk profile and business environment, leverages subject matter expertise, and allows for prioritization of our most critical risks. We perform risk assessments periodically with the aim of ensuring that our material financial and nonfinancial risks are mitigated through controls to an acceptable tolerance level in accordance with our risk appetite. Our risk assessments include, among other things, the use of stress testing, as well as an assessment of our internal control processes designed to mitigate such risks.
Firmwide stress testing is an important part of our risk management process. It allows us to quantify our exposure to tail risks, highlight potential loss concentrations, undertake risk/reward analysis, and assess and mitigate our risk positions. Firmwide stress tests are performed on a regular basis and are designed to ensure a comprehensive analysis of our vulnerabilities and idiosyncratic risks combining financial and nonfinancial risks, including, but not limited to, credit, market, liquidity and funding, operational and compliance, strategic, systemic and emerging risks into our stress scenarios. We also perform ad hoc stress tests in anticipation of market events or conditions. Stress tests are also used to assess capital adequacy as part of our capital planning and stress testing process. See “Capital Management and Regulatory Capital — Capital Management” for further information.
We maintain a daily discipline of marking substantially all of our inventory to current market levels. We carry our inventory at fair value, with changes in valuation reflected immediately in our risk management systems and in net revenues. We do so because we believe this discipline is one of the most effective tools for assessing and managing risk and that it provides transparent and realistic insight into our inventory exposures.
• Risk Appetite, Limits, Thresholds and Alerts. We apply risk limits, thresholds and alerts to control and monitor risk across transactions, products, businesses and markets. The Board, directly or indirectly through its Risk Committee, approves limits, thresholds and alerts included in our risk appetite statement at firmwide, business and product levels. In addition, the Firmwide Risk Appetite Committee, through delegated authority from the Firmwide Enterprise Risk Committee, is responsible for approving our risk limits, thresholds and alerts policy, subject to the overall limits directly or indirectly approved by the Board, and monitoring these limits.
The Firmwide Risk Appetite Committee is responsible for approving and monitoring limits at firmwide, business and product levels. Certain limits may be set at levels that will require periodic adjustment, rather than at levels that reflect our maximum risk appetite. This fosters an ongoing dialogue about risk among our first and second lines of defense, committees and senior management, as well as rapid escalation of risk-related matters. The Firmwide Risk Appetite Committee also authorizes Risk to set limits and thresholds to support monitoring and oversight at a more granular level. For example, Market Risk sets limits at certain product and desk levels, and Credit Risk sets limits for individual counterparties and their subsidiaries, industries and countries. Limits are reviewed regularly and amended on a permanent or temporary basis to reflect changes to our strategic business plan, as well as changing market conditions, business conditions or risk tolerance. Risks limits are monitored by the respective Risk functions.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
• Control Monitoring and Testing. We perform control monitoring and testing to measure the effectiveness of our key controls and to ensure that we are in compliance with policies, codes of conduct, control standards and regulatory requirements. Monitoring and testing is performed by dedicated teams within the first and second lines of defense. These teams establish procedures, develop risk-based annual plans, perform control testing and escalate identified issues.
Issues identified by the dedicated teams, as well as self-identified issues by our employees, are assessed for appropriate escalation and resolution. Where material or thematic issues exist, we develop a plan to remediate them, as appropriate, and monitor the remediation activities.
• Risk Reporting. Effective risk reporting depends on our ability to get the right information to the right people at the right time. Risk reporting is designed to be both forward- and backward-looking and consider detailed information on existing and emerging risk exposures. Risk reporting may include stress testing and scenario analysis, information about the risk profiles for financial and nonfinancial risks, utilization of risk limits and thresholds, details of new and emerging risks identified through our risk identification processes, details of issues, significant internal and external events, and information related to the effectiveness of our controls and remediation plans. As such, we focus on the rigor and effectiveness of our risk systems, with the objective of ensuring that our risk management technology systems provide us with complete, accurate and timely information. Our risk reporting process is designed to take into account information about both existing and emerging risks, thereby enabling our risk committees and senior management to perform their responsibilities with the appropriate level of insight into risk exposures.
We make extensive use of risk committees and councils that meet regularly and serve as an important means to facilitate and foster ongoing discussions to manage and mitigate risks.
We maintain strong and proactive communication about risk and we have a culture of collaboration in decision-making among our first and second lines of defense, committees and senior management. While our first line of defense is accountable and responsible for management of their risk, we dedicate extensive resources to our second line of defense in order to reinforce the importance of having effective oversight and challenge, and a strong culture of escalation and accountability across all functions.
People. Even the best technology serves only as a tool for helping to make informed decisions in real time about the risks we are taking. Ultimately, effective risk management requires our people to interpret our risk data on an ongoing and timely basis and adjust risk positions accordingly. The experience of our professionals, and their understanding of the nuances and limitations of each risk measure, guides us in assessing exposures and maintaining them within prudent levels.
We reinforce a culture of effective risk management, consistent with our risk appetite, in our training and development programs, as well as in the way we evaluate performance, and recognize and reward our people. Our training and development programs, including certain sessions led by our most senior leaders, are focused on the importance of risk management, client relationships and reputational excellence. As part of our performance review process, we assess reputational excellence, including how an employee exercises good risk management and reputational judgment, and adheres to our code of conduct and compliance policies. Our review and reward processes are designed to communicate and reinforce to our professionals the link between behavior and how people are recognized, the need to focus on our clients and our reputation, and the need to always act in accordance with our highest standards.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Structure
Ultimate oversight of risk is the responsibility of our Board. The Board oversees risk both directly and through its committees, including its Risk Committee. We also have a series of committees that generally consist of senior managers, including from both our first and second lines of defense, with specific risk management mandates that have oversight or decision-making responsibilities for risk management activities. We have an established policy for these committees so that appropriate information barriers are in place. Our primary risk committees, most of which also have additional sub-committees, councils or working groups, are described below. In addition to these committees, we have other risk committees that provide oversight for different businesses, activities, products, regions and entities. All of our committees have responsibility for considering the impact on our reputation of the transactions and activities that they oversee.
Membership of our risk committees is reviewed regularly and updated to reflect changes in the responsibilities of the committee members. Accordingly, the length of time that members serve on the respective committees varies as determined by the committee chairs and based on the responsibilities of the members.
The chart below presents an overview of our risk management governance structure.
Management Committee. The Management Committee oversees our global activities. It provides this oversight directly and through delegated authority. This committee consists of our most senior leaders, and is chaired by our chief executive officer. Most members of the Management Committee are also members of other committees. The following are the committees that are principally involved in firmwide risk management.
Firmwide Enterprise Risk Committee. The Firmwide Enterprise Risk Committee is responsible for overseeing all of our financial and nonfinancial risks. As part of such oversight, the committee is responsible for the ongoing review, approval and monitoring of our enterprise risk management framework, as well as our risk limits, and thresholds and alerts policy, through delegated authority to the Firmwide Risk Appetite Committee. The Firmwide Enterprise Risk Committee also reviews new significant strategic business initiatives to determine whether they are consistent with our risk appetite and risk management capabilities. Additionally, the Firmwide Enterprise Risk Committee performs enhanced reviews of significant risk events, the top residual and emerging risks, and the overall risk and control environment in each of our business units in order to propose uplifts, identify elements that are common to all business units and analyze the consolidated residual risks that we face. This committee, which reports to the Management Committee, is co-chaired by our president and chief operating officer and our chief risk officer, who are appointed as chairs by our chief executive officer, and the vice-chair is our chief financial officer, who is appointed as vice-chair by the chairs of the Firmwide Enterprise Risk Committee. The following are the primary committees that report to the Firmwide Enterprise Risk Committee:
• Firmwide New Activity Committee. The Firmwide New Activity Committee is responsible for reviewing new activities and, upon referral by the Firmwide Enterprise Risk Committee, significant strategic business initiatives. Additionally, the Firmwide New Activity Committee may review previously approved activities that are significant and/or that have changed in complexity and/or structure or present different reputational and suitability concerns over time to consider whether these activities remain appropriate. This committee is co-chaired by the head of Finance Risk and a managing director within Controllers, who are appointed as chairs by the chairs of the Firmwide Enterprise Risk Committee.
• Firmwide Technology Risk Committee. The Firmwide Technology Risk Committee is responsible for reviewing matters related to the design, development, deployment and use of technology. This committee oversees cybersecurity matters, as well as technology risk management frameworks and methodologies, and monitors their effectiveness. This committee is co-chaired by our CISO and our chief technology officer, who are appointed as chairs by the chairs of the Firmwide Enterprise Risk Committee. To assist the Firmwide Technology Risk Committee in carrying out its mandate, the Firmwide Artificial Intelligence Risk and Controls Committee, which oversees risks associated with the use of AI, reports to the Firmwide Technology Risk Committee .
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
• Firmwide Compliance and Operational Risk Committee. The Firmwide Compliance and Operational Risk Committee is responsible for overseeing compliance and operational risk. This committee is co-chaired by our chief operating officer of Engineering, our head of Operational Risk, and our chief compliance officer, who are appointed as chairs by the chairs of the Firmwide Enterprise Risk Committee.
• Firmwide Risk Appetite Committee. The Firmwide Risk Appetite Committee (through delegated authority from the Firmwide Enterprise Risk Committee) is responsible for the ongoing approval and monitoring of risk frameworks, policies and parameters related to our risk management processes, as well as limits, thresholds and alerts, at firmwide, business and product levels. In addition, this committee is responsible for overseeing our financial and model risks and reviews the results of stress tests and scenario analyses. To assist the Firmwide Risk Appetite Committee in carrying out its mandate, a number of other risk committees with dedicated oversight for stress testing, model risks, Volcker Rule compliance, as well as our investments or other capital commitments that may give rise to financial risk, report into the Firmwide Risk Appetite Committee. This committee is chaired by our chief risk officer, who is appointed as chair by the chairs of the Firmwide Enterprise Risk Committee. The Firmwide Capital Committee and Firmwide Commitments Committee report to the Firmwide Risk Appetite Committee.
• Firmwide Reputational Risk Committee. The Firmwide Reputational Risk Committe e is responsible for assessing reputational risks arising from opportunities that have been identified as having potential heightened reputational risk, including transactions identified pursuant to the criteria established by the Firmwide Reputational Risk Committee and as determined by committee leadership. This committee is also responsible for overseeing client-related business standards and addressing client-related reputational risk. This committee is chaired by our president and chief operating officer, who is appointed as chair by our chief executive officer, and the vice-chairs are our chief legal officer and the head of Conflicts Resolution, who are appointed as vice-chairs by the chair of the Firmwide Reputational Risk Committee. The Firmwide Suitability Committee reports to the Firmwide Reputational Risk Committee.
• Firmwide Data Governance Committee. The Firmwide Data Governance Committee is responsible for overseeing the firmwide data governance framework, and its implementation, to help ensure that data governance and data quality are appropriate. This committee is co-chaired by our chief information officer and an advisory director, who are appointed as chairs by the chairs of the Firmwide Enterprise Risk Committee.
Firmwide Asset Liability Committee. The Firmwide Asset Liability Committee is responsible for the strategic direction of our financial resources, including capital, liquidity, funding and balance sheet. This committee has oversight responsibility for asset-liability management, including interest rate and currency risk, funds transfer pricing, capital allocation and incentives, and credit ratings. This committee is co-chaired by our chief financial officer and our global treasurer, who are appointed as chairs by our chief executive officer, and reports to the Management Committee.
Liquidity Risk Management
Overview
Liquidity risk is the risk that we will be unable to fund ourselves or meet our liquidity needs in the event of firm-specific, broader industry or market liquidity stress events. We have in place a comprehensive and conservative set of liquidity and funding policies. Our principal objective is to be able to fund ourselves and to enable our core businesses to continue to serve clients and generate revenues, even under adverse circumstances.
Corporate Treasury is responsible for our liquidity and its related risks, including developing and executing our liquidity and funding strategy and policies.
Liquidity Risk, which is part of our second line of defense and reports to our chief risk officer, has primary responsibility for independently assessing, monitoring and managing our liquidity risk by providing firmwide review and challenge across our global businesses.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Liquidity Risk Management Principles
We manage liquidity risk according to three principles: (i) hold sufficient excess liquidity in the form of GCLA to cover outflows during a stressed period, (ii) maintain appropriate Asset-Liability Management and (iii) maintain a viable Contingency Funding Plan.
GCLA. GCLA is liquidity that we maintain to meet a broad range of potential cash outflows and collateral needs in a stressed environment. A primary liquidity principle is to pre-fund our estimated potential cash and collateral needs during a liquidity crisis and hold this liquidity in the form of unencumbered, highly liquid securities and cash. We believe that the securities held in our GCLA would be readily convertible to cash in a matter of days, through liquidation, by entering into collateralized financings or from maturities of collateralized agreements, and that this cash would allow us to meet immediate obligations without needing to sell other assets or depend on additional funding from credit-sensitive markets.
Our GCLA reflects the following principles:
• The first days or weeks of a liquidity crisis are the most critical to a company’s survival;
• Focus must be maintained on all potential cash and collateral outflows, not just disruptions to financing flows. Our businesses are diverse, and our liquidity needs are determined by many factors, including market movements, collateral requirements and client commitments, all of which can change dramatically in a difficult funding environment;
• During a liquidity crisis, credit-sensitive funding, including unsecured debt, certain deposits and some types of secured financing agreements, may be unavailable, and the terms (e.g., interest rates, collateral provisions and tenor) or availability of other types of secured financing may change and certain deposits may be withdrawn; and
• As a result of our policy to pre-fund liquidity that we estimate may be needed in a crisis, we hold more unencumbered securities and have larger funding balances than our businesses would otherwise require. We believe that our liquidity is stronger with greater balances of highly liquid unencumbered securities, even though it increases our total assets and our funding costs.
We maintain our GCLA across Group Inc., Goldman Sachs Funding LLC (Funding IHC) and Group Inc.’s major broker-dealer and bank subsidiaries, asset types and clearing agents with the goal of providing us with sufficient operating liquidity to ensure timely settlement in all major markets, even in a difficult funding environment. In addition to the GCLA, we maintain cash balances and securities in several of our other entities, primarily for use in specific currencies, entities or jurisdictions where we do not have immediate access to parent company liquidity.
Asset-Liability Management. Our liquidity risk management policies are designed to ensure we have a sufficient amount of financing, even when funding markets experience persistent stress. We manage the maturities and diversity of our funding across markets, products and counterparties, and seek to maintain a diversified funding profile with an appropriate tenor, taking into consideration the characteristics and liquidity profile of our assets.
Our approach to asset-liability management includes:
• Conservatively managing the overall characteristics of our funding book, with a focus on maintaining long-term, diversified sources of funding in excess of our current requirements. See “Balance Sheet and Funding Sources — Funding Sources” for further information;
• Actively managing and monitoring our asset base, with particular focus on the liquidity, holding period and ability to fund assets on a secured basis. We assess our funding requirements and our ability to liquidate assets in a stressed environment while appropriately managing risk. This enables us to determine the most appropriate funding products and tenors. See “Balance Sheet and Funding Sources — Balance Sheet Management” for further information about our balance sheet management process and “— Funding Sources — Secured Funding” for further information about asset classes that may be harder to fund on a secured basis; and
• Raising secured and unsecured financing that has a long tenor relative to the liquidity profile of our assets. This reduces the risk that our liabilities will come due in advance of our ability to generate liquidity from the sale of our assets. Because we maintain a highly liquid balance sheet, the holding period of certain of our assets may be materially shorter than their contractual maturity dates.
Our goal is to ensure that we maintain sufficient liquidity to fund our assets and meet our contractual and contingent obligations in normal times, as well as during periods of market stress. Through our dynamic balance sheet management process, we use actual and projected asset balances to determine secured and unsecured funding requirements. Risk and the Firmwide Asset Liability Committee review our total unsecured long-term borrowings and total shareholders’ equity to help ensure that we maintain a level of long-term funding that is sufficient to meet our long-term financing requirements. In a liquidity crisis, we would begin by liquidating and monetizing our GCLA before selling other assets. However, we recognize that orderly asset sales may be prudent or necessary in a severe or persistent liquidity crisis.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Subsidiary Funding Policies
The majority of our unsecured borrowings is raised by Group Inc., which provides the necessary funds to Funding IHC and other subsidiaries, some of which are regulated, to meet their asset financing, liquidity and capital requirements. In addition, Group Inc. provides its regulated subsidiaries with the necessary capital to meet their regulatory requirements. The benefits of this approach to subsidiary funding are enhanced control and greater flexibility to meet the funding requirements of our subsidiaries. Funding is also raised at the subsidiary level through a variety of products, including deposits, secured funding and unsecured borrowings.
Our intercompany funding policies assume that a subsidiary’s funds or securities are not freely available to its parent, Funding IHC or other subsidiaries unless (i) legally provided for and (ii) there are no additional regulatory, tax or other restrictions. In particular, many of our subsidiaries are subject to laws that authorize regulatory bodies to block or reduce the flow of funds from those subsidiaries to Group Inc. or Funding IHC. Regulatory action of that kind could impede access to funds that Group Inc. needs to make payments on its obligations. Accordingly, we assume that the capital provided to our regulated subsidiaries is not available to Group Inc. or other subsidiaries and any other financing provided to our regulated subsidiaries is not available to Group Inc. or Funding IHC until the maturity of such financing.
Group Inc. has provided substantial amounts of equity and subordinated indebtedness, directly or indirectly, to its regulated subsidiaries. For example, as of December 2025, Group Inc. had $39.51 billion of equity and subordinated indebtedness invested in GS&Co., its principal U.S. registered broker-dealer; $50.78 billion invested in GSI, a regulated U.K. broker-dealer; $1.96 billion invested in GSJCL, a regulated Japanese broker-dealer; $65.15 billion invested in GS Bank USA, a regulated New York State-chartered bank; and $5.89 billion invested in GSIB, a regulated U.K. bank. Group Inc. also provides financing, directly or indirectly, in the form of: $167.40 billion of unsubordinated loans (including secured loans of $60.78 billion) and $29.12 billion of collateral and cash deposits to these entities as of December 2025. In addition, as of December 2025, Group Inc. had significant amounts of capital invested in and loans to its other regulated subsidiaries.
Contingency Funding Plan. We maintain a contingency funding plan to provide a framework for analyzing and responding to a liquidity crisis situation or periods of market stress. Our contingency funding plan outlines a list of potential risk factors, key reports and metrics that are reviewed on an ongoing basis to assist in assessing the severity of, and managing through, a liquidity crisis and/or market dislocation. The contingency funding plan also describes in detail our potential responses if our assessments indicate that we have entered a liquidity crisis, which include pre-funding for what we estimate will be our potential cash and collateral needs, as well as utilizing secondary sources of liquidity. Mitigants and action items to address specific risks which may arise are also described and assigned to individuals responsible for execution.
The contingency funding plan identifies key groups of individuals and their responsibilities, which include fostering effective coordination, control and distribution of information, implementing liquidity maintenance activities and managing internal and external communication, all of which are critical in the management of a crisis or period of market stress.
Stress Tests
In order to determine the appropriate size of our GCLA, we model liquidity outflows over a range of scenarios and time horizons. One of our primary internal liquidity risk models, referred to as the Modeled Liquidity Outflow, quantifies our liquidity risks over a 30-day stress scenario. We also consider other factors, including, but not limited to, an assessment of our potential intraday liquidity needs through an additional internal liquidity risk model, referred to as the Intraday Liquidity Model, the results of our long-term stress testing models, our resolution liquidity models and other applicable regulatory requirements and a qualitative assessment of our condition, as well as the financial markets. The results of the Modeled Liquidity Outflow, the Intraday Liquidity Model, the long-term stress testing models and the resolution liquidity models are reported to senior management on a regular basis. We also perform firmwide stress tests. See “Overview and Structure of Risk Management” for information about firmwide stress tests.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Modeled Liquidity Outflow. Our Modeled Liquidity Outflow is based on conducting multiple scenarios that include combinations of market-wide and firm-specific stress. These scenarios are characterized by the following qualitative elements:
• Severely challenged market environments, which include low consumer and corporate confidence, financial and political instability, and adverse changes in market values, including potential declines in equity markets and widening of credit spreads; and
• A firm-specific crisis potentially triggered by material losses, reputational damage (including, as a result of, the dissemination of negative information through social media), litigation and/or a ratings downgrade.
The following are key modeling elements of our Modeled Liquidity Outflow:
• Liquidity needs over a 30-day scenario;
• A two-notch downgrade of our long-term senior unsecured credit ratings;
• Changing conditions in funding markets, which limit our access to unsecured and secured funding;
• No support from additional government funding facilities. Although we have access to various central bank funding programs, we do not assume reliance on additional sources of funding in a liquidity crisis; and
• A combination of contractual outflows and contingent outflows arising from both our on- and off-balance sheet arrangements. Contractual outflows include, among other things, upcoming maturities of unsecured debt, term deposits and secured funding. Contingent outflows include, among other things, the withdrawal of customer credit balances in our prime brokerage business, increase in variation margin requirements due to adverse changes in the value of our exchange-traded and OTC-cleared derivatives, draws on unfunded commitments and withdrawals of deposits that have no contractual maturity. See notes to the consolidated financial statements for further information about contractual outflows, including Note 11 for collateralized financings, Note 13 for deposits, Note 14 for unsecured long-term borrowings and Note 15 for operating lease payments, and “Off-Balance Sheet Arrangements” for further information about our various types of off-balance sheet arrangements.
Intraday Liquidity Model. Our Intraday Liquidity Model measures our intraday liquidity needs in a scenario where access to sources of intraday liquidity may become constrained. The intraday liquidity model considers a variety of factors, including historical settlement activity.
Long-Term Stress Testing. We utilize longer-term stress tests to take a forward view on our liquidity position through prolonged stress periods in which we experience a severe liquidity stress and recover in an environment that continues to be challenging. We are focused on ensuring conservative asset-liability management to prepare for a prolonged period of potential stress, seeking to maintain a diversified funding profile with an appropriate tenor, taking into consideration the characteristics and liquidity profile of our assets.
Resolution Liquidity Models. In connection with our resolution planning efforts, we have established our Resolution Liquidity Adequacy and Positioning framework, which estimates liquidity needs of our major subsidiaries in a stressed environment. The liquidity needs are measured using our Modeled Liquidity Outflow assumptions and include certain additional inter-affiliate exposures. We have also established our Resolution Liquidity Execution Need framework, which measures the liquidity needs of our major subsidiaries to stabilize and wind down following a Group Inc. bankruptcy filing in accordance with our preferred resolution strategy.
In addition, we have established a triggers and alerts framework, which is designed to provide the Board with information needed to make an informed decision on whether and when to commence bankruptcy proceedings for Group Inc.
Limits
We use liquidity risk limits at various levels and across liquidity risk types to manage the size of our liquidity exposures. Limits are measured relative to acceptable levels of risk given our liquidity risk tolerance. See “Overview and Structure of Risk Management” for information about the limit approval process.
Limits are monitored by Corporate Treasury and Liquidity Risk. Liquidity Risk is responsible for identifying and escalating to senior management and/or the appropriate risk committee, on a timely basis, instances where limits have been exceeded.
GCLA and Unencumbered Metrics
GCLA. Based on the results of our internal liquidity risk models, described above, as well as our consideration of other factors, including, but not limited to, a qualitative assessment of our condition, as well as the financial markets, we believe our liquidity position as of both December 2025 and December 2024 was appropriate. We strictly limit our GCLA to a narrowly defined list of securities and cash because they are highly liquid, even in a difficult funding environment. We do not include other potential sources of excess liquidity in our GCLA, such as less liquid unencumbered securities or committed credit facilities.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
The table below presents information about our GCLA.
Average for the
Three Months
Year Ended
Ended December
December
$ in millions
Denomination
U.S. dollar
Non-U.S. dollar
Total
Asset Class
Overnight cash deposits
U.S. government obligations
U.S. agency obligations
Non-U.S. government obligations
Total
Entity Type
Group Inc. and Funding IHC
Major broker-dealer subsidiaries
Major bank subsidiaries
Total
In the table above:
• The U.S. dollar-denominated GCLA consists of (i) unencumbered U.S. government and agency obligations (including highly liquid U.S. agency mortgage-backed obligations), all of which are eligible as collateral in Federal Reserve open market operations and (ii) certain overnight U.S. dollar cash deposits.
• The non-U.S. dollar-denominated GCLA consists of non-U.S. government obligations (only unencumbered German, French, Japanese and U.K. government obligations) and certain overnight cash deposits in highly liquid currencies.
We maintain our GCLA to enable us to meet current and potential liquidity requirements of our parent company, Group Inc., and its subsidiaries. Our Modeled Liquidity Outflow and Intraday Liquidity Model incorporate a requirement for Group Inc., as well as a standalone requirement for each of our major broker-dealer and bank subsidiaries. Funding IHC is required to provide the necessary liquidity to Group Inc. during the ordinary course of business, and is also obligated to provide capital and liquidity support to major subsidiaries in the event of our material financial distress or failure. Liquidity held directly in each of our major broker-dealer and bank subsidiaries is intended for use only by that subsidiary to meet its liquidity requirements and is assumed not to be available to Group Inc. or Funding IHC unless (i) legally provided for and (ii) there are no additional regulatory, tax or other restrictions. In addition, the Modeled Liquidity Outflow and Intraday Liquidity Model also incorporate a broader assessment of standalone liquidity requirements for other subsidiaries and we hold a portion of our GCLA directly at Group Inc. or Funding IHC to support such requirements.
Other Unencumbered Assets. In addition to our GCLA, we have a significant amount of other unencumbered cash and financial instruments, including other government obligations, high-grade money market securities, corporate obligations, marginable equities, loans and cash deposits not included in our GCLA. The fair value of our unencumbered assets averaged $343.36 billion for the three months ended December 2025, $295.49 billion for the three months ended December 2024, $327.16 billion for the year ended December 2025 and $292.22 billion for the year ended December 2024. We do not consider these assets liquid enough to be eligible for our GCLA.
Liquidity Regulatory Framework
We are subject to a minimum Liquidity Coverage Ratio (LCR) under the LCR rule approved by the U.S. federal bank regulatory agencies. The LCR rule requires organizations to maintain an adequate ratio of eligible high-quality liquid assets (HQLA) to expected net cash outflows under an acute, short-term liquidity stress scenario. Eligible HQLA excludes HQLA held by subsidiaries that is in excess of their minimum requirement and is subject to transfer restrictions. We are required to maintain a minimum LCR of 100%. We expect that fluctuations in client activity, business mix and the market environment will impact our LCR.
The table below presents information about our average daily LCR.
Average for the
Three Months Ended
December
September
December
$ in millions
Total HQLA
Eligible HQLA
Net cash outflows
LCR
I n the table above, our average quarterly LCR represents the average of our daily LCRs during the quarter.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
We are also subject to a minimum Net Stable Funding Ratio (NSFR) under the NSFR rule approved by the U.S. federal bank regulatory agencies. The NSFR rule requires large U.S. banking organizations to maintain available stable funding (ASF) above their required stable funding (RSF) over a one-year time horizon. Total ASF excludes ASF held by subsidiaries that is in excess of their minimum requirement and is subject to transfer restrictions. We are required to maintain a minimum NSFR of 100%. We expect that fluctuations in client activity, business mix and the market environment will impact our NSFR.
The table below presents information about our average daily NSFR.
Average for the
Three Months Ended
December
September
December
$ in millions
Total ASF
Total RSF
NSFR
In the table above, our average quarterly NSFR represents the average of our daily NSFRs during the quarter.
GS Bank USA, GSI, GSIB and GSBE are also subject to minimum LCR and NSFR requirements as set by their respective regulators. As of December 2025, both the LCR and NSFR for each of these subsidiaries exceeded the minimum requirements.
We monitor local regulatory liquidity requirements of our other subsidiaries to ensure compliance. For many of our subsidiaries, these requirements either have changed or are likely to change in the future due to the implementation of the Basel Committee’s framework for liquidity risk measurement, standards and monitoring, as well as other regulatory developments.
The implementation of these rules and any amendments adopted by the regulatory authorities could impact our liquidity and funding requirements and practices in the future.
Credit Ratings
We rely on the short- and long-term debt capital markets to fund a significant portion of our day-to-day operations, and the cost and availability of debt financing is influenced by our credit ratings. Credit ratings are also important when we are competing in certain markets, such as OTC derivatives, and when we seek to engage in longer-term transactions. See “Risk Factors” in Part I, Item 1A of this Form 10-K for information about the risks associated with a reduction in our credit ratings.
The table below presents the unsecured credit ratings and outlook of Group Inc.
As of December 2025
DBRS
Fitch
Moody’s
Short-term debt
R-1 (middle)
Long-term debt
A (high)
BBB+
Subordinated debt
BBB+
Baa2
BBB
Trust preferred
BBB-
Baa3
Preferred stock
BBB (high)
BBB-
Ratings outlook
Stable
Stable
Stable
Stable
Stable
In the table above:
• The ratings and outlook are by DBRS, Inc. (DBRS), Fitch, Inc. (Fitch), Moody’s Investors Service (Moody’s), Rating and Investment Information, Inc. (R&I), and Standard & Poor’s Ratings Services (S&P).
• The ratings for trust preferred relate to the guaranteed preferred beneficial interests issued by Goldman Sachs Capital I.
• The DBRS, Fitch, Moody’s and S&P ratings for preferred stock include the APEX issued by Goldman Sachs Capital II and Goldman Sachs Capital III.
The table below presents the unsecured credit ratings and outlook of GS Bank USA, GSIB, GSBE, GS&Co. and GSI.
As of December 2025
Fitch
Moody’s
GS Bank USA
Short-term debt
Long-term debt
Short-term bank deposits
Long-term bank deposits
Ratings outlook
Stable
Stable
Stable
GSIB
Short-term debt
Long-term debt
Short-term bank deposits
Long-term bank deposits
Ratings outlook
Stable
Stable
Stable
GSBE
Short-term debt
Long-term debt
Short-term bank deposits
Long-term bank deposits
Ratings outlook
Stable
Stable
Stable
Short-term debt
Long-term debt
Ratings outlook
Stable
Stable
GSI
Short-term debt
Long-term debt
Ratings outlook
Stable
Stable
Stable
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
We believe our credit ratings are primarily based on the credit rating agencies’ assessment of:
• Our liquidity, market, credit and operational risk management practices;
• Our level and variability of earnings;
• Our capital base;
• Our franchise, reputation and management;
• Our corporate governance; and
• The external operating and economic environment, including, in some cases, the assumed level of government support or other systemic considerations, such as potential resolution.
Certain of our derivatives have been transacted under bilateral agreements with counterparties who may require us to post collateral or terminate the transactions based on changes in our credit ratings. We manage our GCLA to ensure we would, among other potential requirements, be able to make the additional collateral or termination payments that may be required in the event of a two-notch reduction in our long-term credit ratings, as well as collateral that has not been called by counterparties, but is available to them. See Note 7 to the consolidated financial statements for further information about derivatives with credit-related contingent features and the additional collateral or termination payments related to our net derivative liabilities under bilateral agreements that could have been called by counterparties in the event of a one- or two-notch downgrade in our credit ratings.
Cash Flows
As a global financial institution, our cash flows are complex and bear little relation to our net earnings and net assets. Consequently, we believe that traditional cash flow analysis is less meaningful in evaluating our liquidity position than the liquidity and asset-liability management policies described above. Cash flow analysis may, however, be helpful in highlighting certain macro trends and strategic initiatives in our businesses.
Year Ended December 2025. Our cash and cash equivalents decreased by $17.83 billion to $164.26 billion at the end of 2025, primarily due to net cash used for operating activities and investing activities, partially offset by net cash provided by financing activities. The net cash used for operating activities primarily reflected cash outflows from trading assets and customer and other receivables and payables, net (reflecting an increase in customer and other receivables, partially offset by an increase in customer and other payables), partially offset by cash inflows from trading liabilities and net earnings. The net cash used for investing activities primarily reflected an increase in net lending activities (reflecting increases in other collateralized lending and real estate loans). The net cash provided by financing activities primarily reflected cash inflows from deposits (reflecting increases in consumer deposits and other deposit balances).
Year Ended December 2024 . O ur cash and cash equivalents decreased by $59.49 billion to $182.09 billion at the end of 2024, primarily due to net cash used for investing activities and operating activities, partially offset by financing activities. The net cash used for investing activities primarily reflected net purchases of U.S. government obligations accounted for as available-for-sale securities and an increase in net lending activities (reflecting increases in other collateralized loans). The net cash used for operating activities primarily reflected cash outflows from trading assets, partially offset by cash inflows from collateralized transactions (reflecting both an increase in collateralized financings and a decrease in collateralized agreements). The net cash provided by financing activities primarily reflected cash inflows from other secured financings and deposits (reflecting increases in consumer deposits, partially offset by decreases in transaction banking deposits and other deposits), partially offset by common stock repurchases and net repayments of unsecured long-term borrowings.
For an analysis of cash flows for the year ended December 2023, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Market Risk Management
Overview
Market risk is the risk of an adverse impact to our earnings due to changes in market conditions. Our assets and liabilities that give rise to market risk primarily include positions held for market making for our clients and for our investing and financing activities, and these positions change based on client demands and our investment opportunities. We employ a variety of risk measures, each described in the respective sections below, to monitor market risk. Categories of market risk include the following:
• Interest rate risk: results from exposures to changes in the level, slope and curvature of yield curves, the volatilities of interest rates, prepayment speeds and credit spreads;
• Equity price risk: results from exposures to changes in prices and volatilities of individual equities, baskets of equities and equity indices;
• Currency rate risk: results from exposures to changes in spot prices, forward prices and volatilities of currency rates; and
• Commodity price risk: results from exposures to changes in spot prices, forward prices and volatilities of commodities, such as crude oil, petroleum products, natural gas, electricity, and precious and base metals.
Market Risk, which is part of our second line of defense and reports to our chief risk officer, has primary responsibility for independently assessing, monitoring and managing our market risk by providing firmwide review and challenge across our global businesses.
Managers in revenue-producing units, Corporate Treasury and Market Risk discuss market information, positions and estimated loss scenarios on an ongoing basis. Managers in revenue-producing units and Corporate Treasury are accountable for managing risk within prescribed limits. These managers have in-depth knowledge of their positions, markets and the instruments available to hedge their exposures.
Market Risk Management Process
Our process for managing market risk includes the critical components of our risk management framework described in the “Overview and Structure of Risk Management,” as well as the following:
• Monitoring compliance with established market risk limits and reporting our exposures;
• Diversifying exposures;
• Controlling position sizes; and
• Evaluating mitigants, such as economic hedges in related securities or derivatives.
Our market risk management systems enable us to perform an independent calculation of VaR, Earnings-at-Risk (EaR) and other stress measures, capture risk measures at individual position levels, attribute risk measures to individual risk factors of each position, report many different views of the risk measures (e.g., by desk, business, product type or entity) and produce ad hoc analyses in a timely manner.
Risk Measures
We produce risk measures and monitor them against established market risk limits. These measures reflect an extensive range of scenarios and the results are aggregated at product, business and firmwide levels.
We use a variety of risk measures to estimate the size of potential losses for small, moderate and more extreme market moves over both short- and long-term time horizons. Our primary risk measures are VaR, EaR and other stress tests.
Our risk reports detail key risks, drivers and changes for each desk and business, and are distributed daily to senior management of both our revenue-producing units and Risk.
Value-at-Risk. VaR is the potential loss in value due to adverse market movements over a defined time horizon with a specified confidence level. For assets and liabilities included in VaR, see “Financial Statement Linkages to Market Risk Measures.” We typically employ a one-day time horizon with a 95% confidence level. We use a single VaR model, which captures risks, including those related to interest rates, equity prices, currency rates and commodity prices. As such, VaR facilitates comparison across portfolios of different risk characteristics. VaR also captures the diversification of aggregated risk at the firmwide level.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
We are aware of the inherent limitations to VaR and therefore use a variety of risk measures in our market risk management process. Inherent limitations to VaR include:
• VaR does not estimate potential losses over longer time horizons where moves may be extreme;
• VaR does not take account of the relative liquidity of different risk positions; and
• Previous moves in market risk factors may not produce accurate predictions of all future market moves.
To comprehensively capture our exposures and relevant risks in our VaR calculation, we use historical simulations with full valuation of market factors at the position level by simultaneously shocking the relevant market factors for that position. These market factors include spot prices, credit spreads, funding spreads, yield curves, volatility and correlation, and are updated periodically based on changes in the composition of positions, as well as variations in market conditions. We sample from five years of historical data to generate the scenarios for our VaR calculation. The historical data is weighted so that the relative importance of the data reduces over time. This gives greater importance to more recent observations and reflects current asset volatilities, which improves the accuracy of our estimates of potential loss. As a result, even if our positions included in VaR were unchanged, our VaR would increase with increasing market volatility and vice versa.
Given its reliance on historical data, VaR is most effective in estimating risk exposures in markets in which there are no sudden fundamental changes or shifts in market conditions.
Our VaR measure does not include:
• Positions that are not accounted for at fair value, such as held-to-maturity securities and loans, deposits and unsecured borrowings that are accounted for at amortized cost;
• Available-for-sale securities for which the related unrealized fair value gains and losses are included in accumulated other comprehensive income/(loss);
• Positions that are best measured and monitored using sensitivity measures; and
• The impact of changes in counterparty and our own credit spreads on derivatives, as well as changes in our own credit spreads on financial liabilities for which the fair value option was elected.
We perform daily backtesting of our VaR model (i.e., comparing daily net revenues for positions included in VaR to the VaR measure calculated as of the prior business day) at the firmwide level and for each of our businesses and major regulated subsidiaries.
Earnings-at-Risk. We manage our interest rate risk using the EaR metric. EaR measures the estimated impact of changes in interest rates to our net revenues and preferred stock dividends over a defined time horizon. EaR complements the VaR metric, which measures the impact of interest rate changes that have an immediate impact on the fair values of our assets and liabilities (i.e., mark-to-market changes). Our exposure to interest rate risk occurs due to a variety of factors, including, but not limited to:
• Differences in maturity or repricing dates of assets, liabilities, preferred stock and certain off-balance sheet instruments.
• Differences in the amounts of assets, liabilities, preferred stock and certain off-balance sheet instruments with the same maturity or repricing dates.
• Certain interest rate sensitive fees.
Corporate Treasury manages the interest rate risk from all businesses using both cash and derivative instruments, including available-for-sale and held-to-maturity securities and interest rate derivatives. We measure EaR over a one-year time horizon, including a 100- and 200-basis point instantaneous parallel shock in both short- and long-term interest rates. This sensitivity is calculated relative to a baseline market scenario, which takes into consideration, among other things, the market’s expectation of forward rates, as well as our expectation of future business activity. These scenarios include contractual elements of assets, liabilities, preferred stock, and certain off-balance sheet instruments, such as rates of interest, principal repayment schedules, maturity and reset dates, and any interest rate ceilings or floors, as well as assumptions with respect to our balance sheet size and composition, prepayment behavior and deposit repricing. Deposit repricing is captured by evaluating the change in deposit rate paid relative to the change in market rates (deposit beta) and we calibrate the deposit betas used in our models by using a number of factors, including observed historical behavior, future expectations, funding needs and the competitive landscape. We continuously monitor the performance of our key assumptions against observed behavior and regularly review their sensitivity on our risk metrics.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
We manage EaR with a goal to reduce potential volatility resulting from changes in interest rates so it remains within our EaR risk appetite. Our EaR scenario is regularly evaluated and updated, if necessary, to reflect changes in our business plans, market conditions and other macroeconomic factors. While management uses the best information available to estimate EaR, actual results may differ materially as a result of, among other things, changes in the economic environment or assumptions used in the process. We also measure the sensitivity of the economic value of our equity (EVE) to changes in interest rates. Compared to EaR, EVE provides a longer-term measurement of the interest rate risk exposure, primarily on non-trading assets and liabilities, by capturing the net impact of changes in interest rates to the present value of their cash flows.
Corporate Treasury is responsible for our interest rate risk, including assessing, monitoring and managing our EaR and EVE sensitivity, and interest rate risk stress tests and assumptions.
Risk, which is part of our second line of defense and reports to our chief risk officer, has primary responsibility for independently assessing, monitoring and managing our interest rate risk (including EaR and EVE sensitivity) by providing firmwide review and challenge across our global businesses.
Stress Testing. Stress testing is a method of determining the effect of various hypothetical stress scenarios. We use stress tests to examine risks of specific portfolios, as well as the potential impact of our significant risk exposures. We use a variety of stress testing techniques to calculate the potential loss from a wide range of market moves on our portfolios, including firmwide stress tests, sensitivity analysis and scenario analysis. The results of our various stress tests are analyzed together for risk management purposes. See “Overview and Structure of Risk Management” for information about firmwide stress tests.
Sensitivity analysis is used to quantify the impact of a market move in a single risk factor across all positions (e.g., equity prices or credit spreads) using a variety of defined market shocks, ranging from those that could be expected over a one-day time horizon up to those that could take many months to occur. We also use sensitivity analysis to quantify the impact of the default of any single entity, which captures the risk of large or concentrated exposures.
Scenario analysis is used to quantify the impact of a specified event, including how the event impacts multiple risk factors simultaneously. For example, for sovereign stress testing we calculate potential direct exposure associated with our sovereign positions, as well as the corresponding debt, equity and currency exposures associated with our non-sovereign positions that may be impacted by the sovereign distress. When conducting scenario analysis, we often consider a number of possible outcomes for each scenario, ranging from moderate to severely adverse market impacts. In addition, these stress tests are constructed using both historical events and forward-looking hypothetical scenarios.
Unlike VaR measures, which have an implied probability because they are calculated at a specified confidence level, there may not be an implied probability that our stress testing scenarios will occur. Instead, stress testing is used to model both moderate and more extreme moves in underlying market factors. When estimating potential loss, we generally assume that our positions cannot be reduced or hedged (although experience demonstrates that we are generally able to do so).
Limits
We use market risk limits at various levels to manage the size of our market exposures. These limits are set based on VaR, EaR and on a range of stress tests relevant to our exposures. See “Overview and Structure of Risk Management” for information about the limit approval process.
Limits are monitored by Corporate Treasury and Risk. Risk is responsible for identifying and escalating to senior management and/or the appropriate risk committee, on a timely basis, instances where limits have been exceeded (e.g., due to positional changes or changes in market conditions, such as increased volatilities or changes in correlations). Such instances are remediated by a reduction in the positions we hold and/or a temporary or permanent increase to the limit, if warranted.
Metrics
We analyze VaR at the firmwide level and a variety of more detailed levels, including by risk category, business and region. Diversification effect in the tables below represents the difference between total VaR and the sum of the VaR for the four risk categories. This effect arises because the four market risk categories are not perfectly correlated. Substantially all positions in VaR are included within Global Banking & Markets.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
The table below presents our average daily VaR.
Year Ended December
$ in millions
Categories
Interest rates
Equity prices
Currency rates
Commodity prices
Diversification effect
Total
Our average daily VaR decreased to $90 million for 2025 from $92 million for 2024, due to lower levels of volatility. The total decrease was driven by decreases in the interest rates, currency rates and commodity prices categories, partially offset by an increase in the equity prices category and a decrease in the diversification effect.
The table below presents our period-end VaR.
As of December
$ in millions
Categories
Interest rates
Equity prices
Currency rates
Commodity prices
Diversification effect
Total
Our period-end VaR decreased to $79 million as of December 2025 from $91 million as of December 2024, due to lower levels of volatility, partially offset by increased exposures. The total decrease was driven by decreases in the interest rates and currency rates categories, partially offset by a decrease in the diversification effect and increases in the equity prices and commodity prices categories.
During 2025, the firmwide VaR risk limit was not exceeded, raised or reduced, and there were no permanent or temporary changes to the firmwide VaR risk limit. During 2024, there was a permanent increase to the firmwide VaR risk limit due to higher levels of volatility and increased exposures. The firmwide VaR risk limit was not exceeded during this period.
The table below presents our high and low VaR.
Year Ended December
$ in millions
High
Low
High
Low
Categories
Interest rates
Equity prices
Currency rates
Commodity prices
Firmwide
VaR
The chart below presents our daily VaR for 2025.
The table below presents, by number of business days, the frequency distribution of our daily net revenues for positions included in VaR.
Year Ended December
$ in millions
Total
Daily net revenues for positions included in VaR are compared with VaR calculated as of the end of the prior business day. Net losses incurred on a single day for such positions did not exceed our 95% one-day VaR (i.e., a VaR exception) during 2025. There were two VaR exceptions during 2024.
During periods in which we have significantly more positive net revenue days than net revenue loss days, we expect to have fewer VaR exceptions because, under normal conditions, our business model generally produces positive net revenues. In periods in which our franchise revenues are adversely affected, we generally have more loss days, resulting in more VaR exceptions. The daily net revenues for positions included in VaR used to determine VaR exceptions reflect the impact of any intraday activity, including bid/offer net revenues, which are more likely than not to be positive by their nature.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Sensitivity Measures
Certain portfolios and individual positions are not included in VaR because VaR is not the most appropriate risk measure. Other sensitivity measures we use to analyze market risk are described below.
10% Sensitivity Measures. The table below presents our market risk by asset category for positions accounted for at fair value or accounted for at the lower of cost or fair value, that are not included in VaR.
As of December
$ in millions
Equity
Debt
Total
In the table above:
• The market risk of these positions is determined by estimating the potential reduction in net revenues of a 10% decline in the value of the underlying positions.
• Equity positions relate to private and public equity securities, which primarily include investments in corporate, real estate and infrastructure assets. The vast majority of such equity positions are included within Asset & Wealth Management.
• Debt positions include mezzanine and senior debt, and corporate and real estate loans, substantially all of which are included within Asset & Wealth Management. Debt positions also included approximately $19.7 billion as of December 2025 of Apple Card loans and $1.8 billion as of December 2024 of GM co-branded credit card loans within Platform Solutions that were classified as held for sale. The GM credit card program was sold to another issuer in 2025.
• Funded equity and debt positions are included in our consolidated balance sheets in investments and loans, and the related hedges are included in our consolidated balance sheets in derivatives. See Note 8 to the consolidated financial statements for further information about investments, Note 9 to the consolidated financial statements for further information about loans and Note 7 to the consolidated financial statements for further information about derivatives.
• These measures do not reflect the diversification effect across asset categories or across other market risk measures.
Credit and Funding Spread Sensitivity on Derivatives and Financial Liabilities. VaR excludes the impact of changes in counterparty credit spreads, our own credit spreads and unsecured funding spreads on derivatives, as well as changes in our own credit spreads (debt valuation adjustment) on financial liabilities for which the fair value option was elected. The estimated sensitivity to a one basis point increase in credit spreads (counterparty and our own) and unsecured funding spreads on derivatives (including hedges) was a loss of $1 million as of December 2025 and $2 million as of December 2024. In addition, the estimated sensitivity to a one basis point increase in our own credit spreads on financial liabilities for which the fair value option was elected was a gain of $53 million as of December 2025 and $43 million as of December 2024. However, the actual net impact of a change in our own credit spreads is also affected by the liquidity, duration and convexity (as the sensitivity is not linear to changes in yields) of those financial liabilities for which the fair value option was elected, as well as the relative performance of any hedges undertaken.
Earnings-at-Risk. The table below presents the impact of a parallel shift in rates on our net revenues and preferred stock dividends over the next 12 months relative to the baseline scenario.
As of December
$ in millions
+100 basis points parallel shift in rates
-100 basis points parallel shift in rates
+200 basis points parallel shift in rates
-200 basis points parallel shift in rates
In the table above, the EaR metric utilized various assumptions, including, among other things, balance sheet size and composition, prepayment behavior and deposit repricing, all of which have inherent uncertainties. The EaR metric does not represent a forecast of our net revenues and preferred stock dividends.
Other Market Risk Considerations
We make investments in securities that are accounted for as available-for-sale, held-to-maturity or under the equity method which are included in investments in the consolidated balance sheets. See Note 8 to the consolidated financial statements for further information.
Direct investments in real estate are accounted for at cost less accumulated depreciation. See Note 12 to the consolidated financial statements for further information about other assets.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Financial Statement Linkages to Market Risk Measures
We employ a variety of risk measures, each described in the respective sections above, to monitor market risk across the consolidated balance sheets and consolidated statements of earnings. The related gains and losses on these positions are included in market making, other principal transactions, interest income and interest expense in the consolidated statements of earnings, and debt valuation adjustment and unrealized gains/(losses) on available-for-sale securities in the consolidated statements of comprehensive income.
The table below presents certain assets and liabilities accounted for at fair value or accounted for at the lower of cost or fair value in our consolidated balance sheets and the market risk measures used to assess those assets and liabilities.
Assets or Liabilities
Market Risk Measures
Collateralized agreements and financings
VaR
Customer and other receivables
10% Sensitivity Measures
Trading assets and liabilities
VaR
Credit Spread Sensitivity
10% Sensitivity Measures
Investments
VaR
10% Sensitivity Measures
Loans
VaR
10% Sensitivity Measures
Other assets and liabilities
VaR
Deposits
VaR
Credit Spread Sensitivity
Unsecured borrowings
VaR
Credit Spread Sensitivity
In addition to the above, we measure the interest rate risk for all positions within our consolidated balance sheets using the EaR metric.
Credit Risk Management
Overview
Credit risk represents the potential for loss due to the default or deterioration in credit quality of a counterparty (e.g., an OTC derivatives counterparty or a borrower) or an issuer of securities or other instruments we hold. Our exposure to credit risk comes mostly from client transactions in OTC derivatives and loans and lending commitments. Credit risk also comes from cash placed with banks, securities financing transactions (i.e., resale and repurchase agreements and securities borrowing and lending activities) and customer and other receivables.
Credit Risk, which is part of our second line of defense and reports to our chief risk officer, has primary responsibility for independently assessing, monitoring and managing our credit risk by providing firmwide review and challenge across our global businesses. In addition, we hold other positions that give rise to credit risk (e.g., bonds and secondary bank loans). These credit risks are captured as a component of market risk measures, which are monitored and managed by Market Risk. We also enter into derivatives to manage market risk exposures. Such derivatives also give rise to credit risk, which is monitored and managed by Credit Risk.
Credit Risk Management Process
Our process for managing credit risk includes the critical components of our risk management framework described in the “Overview and Structure of Risk Management,” as well as the following:
• Monitoring compliance with established credit risk limits and reporting our credit exposures and credit concentrations;
• Establishing or approving underwriting standards;
• Assessing the likelihood that a counterparty will default on its payment obligations;
• Measuring our current and potential credit exposure and losses resulting from a counterparty default;
• Using credit risk mitigants, including collateral and hedging; and
• Maximizing recovery through active workout and restructuring of claims.
We also perform credit analyses, which incorporate initial and ongoing evaluations of the capacity and willingness of a counterparty to meet its financial obligations. For substantially all of our credit exposures, the core of our process is an annual counterparty credit evaluation or more frequently if deemed necessary as a result of events or changes in circumstances. We determine an internal credit rating for the counterparty by considering the results of the credit evaluations and assumptions with respect to the nature of and outlook for the counterparty’s industry and the economic environment. For collateralized loans, we also take into consideration collateral received or other credit support arrangements when determining an internal credit rating. Senior personnel, with expertise in specific industries, inspect and approve credit reviews and internal credit ratings.
Our risk assessment process may also include, where applicable, reviewing certain key metrics, including, but not limited to, delinquency status, collateral value, FICO credit scores and other risk factors.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Our credit risk management systems capture credit exposure to individual counterparties and on an aggregate basis to counterparties and their subsidiaries. These systems also provide management with comprehensive information about our aggregate credit risk by product, internal credit rating, industry, country and region.
Risk Measures
We measure our credit risk based on the potential loss in the event of non-payment by a counterparty using current and potential exposure. For derivatives and securities financing transactions, current exposure represents the amount presently owed to us after taking into account applicable netting and collateral arrangements, while potential exposure represents our estimate of the future exposure that could arise over the life of a transaction based on market movements within a specified confidence level. Potential exposure also takes into account netting and collateral arrangements. For loans and lending commitments, the primary measure is a function of the notional amount of the position.
Stress Tests
We conduct regular stress tests to calculate the credit exposures, including potential concentrations that would result from applying shocks to counterparty credit ratings or credit risk factors (e.g., currency rates, interest rates, equity prices). These shocks cover a wide range of moderate and more extreme market movements, including shocks to multiple risk factors, consistent with the occurrence of a severe market or economic event. In the case of sovereign default, we estimate the direct impact of the default on our sovereign credit exposures, changes to our credit exposures arising from potential market moves in response to the default, and the impact of credit market deterioration on corporate borrowers and counterparties that may result from the sovereign default. Unlike potential exposure, which is calculated within a specified confidence level, stress testing does not generally assume a probability of these events occurring. We also perform firmwide stress tests. See “Overview and Structure of Risk Management” for information about firmwide stress tests.
To supplement these regular stress tests, as described above, we also conduct tailored stress tests on an ad hoc basis in response to specific events that we deem significant. We also utilize these stress tests to estimate the indirect impact of certain hypothetical events on our country exposures, such as the impact of credit market deterioration on corporate borrowers and counterparties along with the shocks to the risk factors described above. The parameters of these shocks vary based on the scenario reflected in each stress test. We review estimated losses produced by the stress tests in order to understand their magnitude, highlight potential loss concentrations, and assess and seek to mitigate our exposures, where necessary.
Limits
We use credit risk limits at various levels, as well as underwriting standards to manage the size and nature of our credit exposures. Limits for industries and countries are based on our risk appetite and are designed to allow for regular monitoring, review, escalation and management of credit risk concentrations. See “Overview and Structure of Risk Management” for information about the limit approval process.
Credit Risk is responsible for monitoring these limits, and identifying and escalating to senior management and/or the appropriate risk committee, on a timely basis, instances where limits have been exceeded.
Risk Mitigants
To reduce our credit exposures on derivatives and securities financing transactions, we may enter into netting agreements with counterparties that permit us to offset receivables and payables with such counterparties. We may also reduce credit risk with counterparties by entering into agreements that enable us to obtain collateral from them on an upfront or contingent basis and/or to terminate transactions if the counterparty’s credit rating falls below a specified level. We monitor the fair value of the collateral to ensure that our credit exposures are appropriately collateralized. We seek to minimize exposures where there is a significant positive correlation between the creditworthiness of our counterparties and the market value of collateral we receive.
For loans and lending commitments, depending on the credit quality of the borrower and other characteristics of the transaction, we employ a variety of potential risk mitigants. Risk mitigants include collateral provisions, guarantees, covenants, structural seniority of the bank loan claims and, for certain lending commitments, provisions in the legal documentation that allow us to adjust loan amounts, pricing, structure and other terms as market conditions change. The type and structure of risk mitigants employed can significantly influence the degree of credit risk involved in a loan or lending commitment.
When we do not have sufficient visibility into a counterparty’s financial strength or when we believe a counterparty requires support from its parent, we may obtain third-party guarantees of the counterparty’s obligations. We may also seek to mitigate our credit risk using credit derivatives or participation agreements.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Credit Exposures
As of December 2025, our aggregate credit exposure increased compared with December 2024, primarily reflecting an increase in loans and lending commitments, partially offset by a decrease in cash deposits with central banks. The percentage of our credit exposures arising from non-investment-grade counterparties (based on our internally determined public rating agency equivalents) increased slightly compared with December 2024, reflecting a decrease in investment-grade credit exposure related to cash deposits with central banks. Our credit exposures are described further below.
Cash and Cash Equivalents. Our credit exposure on cash and cash equivalents arises from our unrestricted cash, and includes both interest-bearing and non-interest-bearing deposits. We seek to mitigate the risk of credit loss, by placing substantially all of our deposits with highly rated banks and central banks.
The table below presents our credit exposure from unrestricted cash and cash equivalents, and the concentration by industry, region and internally determined public rating agency equivalents.
As of December
$ in millions
Cash and Cash Equivalents
Industry
Financial Institutions
Sovereign
Total
Region
Americas
EMEA
Asia
Total
Credit Quality (Credit Rating Equivalent)
AAA
BBB
BB or lower
Total
The table above excludes cash segregated for regulatory and other purposes of $14.80 billion as of December 2025 and $14.84 billion as of December 2024.
OTC Derivatives. Our credit exposure on OTC derivatives arises primarily from our market-making activities. As a market maker, we enter into derivative transactions to provide liquidity to clients and to facilitate the transfer and hedging of their risks. We also enter into derivatives to manage market risk exposures. We manage our credit exposure on OTC derivatives using the credit risk process, measures, limits and risk mitigants described above.
We generally enter into OTC derivatives transactions under bilateral collateral arrangements that require the daily exchange of collateral. As credit risk is an essential component of fair value, we include a CVA in the fair value of derivatives to reflect counterparty credit risk, as described in Note 7 to the consolidated financial statements. CVA is a function of the present value of expected exposure, the probability of counterparty default and the assumed recovery upon default.
Beginning in the fourth quarter of 2025, the presentation of the components of our net credit exposure has been conformed with the presentation in Note 7 to the consolidated financial statements. The components now reflect the gross fair value of OTC derivatives (before any counterparty or collateral netting) and the netting separately. Previously, the presentation reflected the net OTC derivative assets after application of counterparty and collateral eligible for netting under U.S. GAAP and additional collateral under enforceable credit support agreements that do not meet the criteria for netting under U.S. GAAP. Prior period amounts have been conformed to the current presentation and there were no changes to net credit exposure.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
The table below presents our net credit exposure from OTC derivatives and the concentration by industry and region.
As of December
$ in millions
Gross fair value
Netting
Net credit exposure
Industry
Consumer & Retail
Diversified Industrials
Financial Institutions
Funds
Healthcare
Municipalities & Nonprofit
Natural Resources & Utilities
Sovereign
Technology, Media & Telecommunications
Other (including Special Purpose Vehicles)
Total
Region
Americas
EMEA
Asia
Total
Our credit exposure (before any potential recoveries) to OTC derivative counterparties that defaulted during 2025 remained low, representing less than 2% of our total credit exposure from OTC derivatives.
In the table above:
• Gross fair value excludes the effects of both counterparty netting and collateral, and therefore is not representative of our exposure.
• Netting represents counterparty and collateral netting offset within the consolidated balance sheets, as well as cash collateral and the fair value of securities collateral, primarily U.S. and non-U.S. government and agency obligations, received under credit support agreements, that we consider when determining credit risk, but such collateral is not eligible for netting under U.S. GAAP.
The tables below present the distribution of our OTC derivative assets by tenor and internally determined public rating agency equivalents.
$ in millions
Investment-
Grade
Non-Investment-
Grade / Unrated
Total
As of December 2025
Less than 1 year
1 – 5 years
Greater than 5 years
Gross fair value
Netting
Net credit exposure
As of December 2024
Less than 1 year
1 – 5 years
Greater than 5 years
Gross fair value
Netting
Net credit exposure
Investment-Grade
$ in millions
AAA
BBB
Total
As of December 2025
Less than 1 year
1 – 5 years
Greater than 5 years
Gross fair value
Netting
Net credit exposure
As of December 2024
Less than 1 year
1 – 5 years
Greater than 5 years
Gross fair value
Netting
Net credit exposure
Non-Investment-Grade / Unrated
$ in millions
Unrated
Total
As of December 2025
Less than 1 year
1 – 5 years
Greater than 5 years
Gross fair value
Netting
Net credit exposure
As of December 2024
Less than 1 year
1 – 5 years
Greater than 5 years
Gross fair value
Netting
Net credit exposure
In the tables above:
• Tenor is based on remaining contractual maturity for OTC derivative assets.
• Netting includes counterparty netting and collateral that we consider when determining credit risk (including collateral that is not eligible for netting under U.S. GAAP).
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Lending Activities. We manage our lending activities using the credit risk process, measures, limits and risk mitigants described above. Other lending positions, including secondary trading positions, are risk-managed as a component of market risk. Beginning in the first quarter of 2025, as a result of a decrease in the balance of installment loans (due to the sales of GreenSky and the seller financing loan portfolio in 2024), the remaining installment loans originated by us were included in other loans. Previously, such loans were disclosed separately in the table below. Prior period amounts have been conformed to the current presentation. See Note 9 to the consolidated financial statements for further information about installment loans.
The table below presents our loans and lending commitments.
$ in millions
Loans
Lending
Commitments
Total
As of December 2025
Corporate
Commercial real estate
Residential real estate
Securities-based
Other collateralized
Credit cards
Other
Total
Allowance for loan losses
As of December 2024
Corporate
Commercial real estate
Residential real estate
Securities-based
Other collateralized
Credit cards
Other
Total
Allowance for loan losses
In the table above, lending commitments excluded $6.27 billion as of December 2025 and $5.69 billion as of December 2024 related to issued letters of credit which are classified as guarantees in our consolidated financial statements. See Note 18 to the consolidated financial statements for further information about guarantees.
See Note 9 to the consolidated financial statements for information about net charge-offs on wholesale and consumer loans, as well as past due and nonaccrual loans accounted for at amortized cost.
Corporate. Corporate loans and lending commitments include term loans, revolving lines of credit, letter of credit facilities and bridge loans, and are principally used for operating and general corporate purposes, or in connection with acquisitions. Corporate loans are secured (typically by a senior lien on the assets of the borrower) or unsecured, depending on the loan purpose, the risk profile of the borrower and other factors.
The table below presents our credit exposure from corporate loans and lending commitments, and the concentration by industry, region, internally determined public rating agency equivalents and other credit metrics.
$ in millions
Loans
Lending
Commitments
Total
As of December 2025
Corporate
Industry
Consumer & Retail
Diversified Industrials
Financial Institutions
Funds
Healthcare
Natural Resources & Utilities
Real Estate
Technology, Media & Telecommunications
Other (including Special Purpose Vehicles)
Total
Region
Americas
EMEA
Asia
Total
Credit Quality (Credit Rating Equivalent)
AAA
BBB
BB or lower
Total
As of December 2024
Corporate
Industry
Consumer & Retail
Diversified Industrials
Financial Institutions
Funds
Healthcare
Natural Resources & Utilities
Real Estate
Technology, Media & Telecommunications
Other (including Special Purpose Vehicles)
Total
Region
Americas
EMEA
Asia
Total
Credit Quality (Credit Rating Equivalent)
AAA
BBB
BB or lower
Total
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Commercial Real Estate. Commercial real estate includes originated loans and lending commitments that are directly or indirectly secured by hotels, retail stores, multifamily housing complexes and commercial and industrial properties. Commercial real estate also includes loans and lending commitments extended to clients who warehouse assets that are directly or indirectly backed by commercial real estate. In addition, commercial real estate includes loans purchased by us.
The table below presents our credit exposure from commercial real estate loans and lending commitments, and the concentration by region, internally determined public rating agency equivalents and other credit metrics.
$ in millions
Loans
Lending
Commitments
Total
As of December 2025
Commercial Real Estate
Region
Americas
EMEA
Asia
Total
Credit Quality (Credit Rating Equivalent)
Investment-grade
Non-investment-grade
Total
As of December 2024
Commercial Real Estate
Region
Americas
EMEA
Asia
Total
Credit Quality (Credit Rating Equivalent)
Investment-grade
Non-investment-grade
Unrated
Total
In the table above, the concentration of loans and lending commitments by asset class as of December 2025 was 51% for warehouse and other indirect, 13% for multifamily, 7% for industrials, 7% for hospitality, 4% for office, 1% for mixed use and 17% for other asset classes. The concentration of loans and lending commitments by asset class as of December 2024 was 50% for warehouse and other indirect, 11% for multifamily, 7% for industrials, 5% for hospitality, 4% for office, 3% for mixed use and 20% for other asset classes.
In addition, we also have credit exposure to commercial real estate loans held for securitization of $590 million as of December 2025 and $568 million as of December 2024. Such loans are included in trading assets in our consolidated balance sheets.
Residential Real Estate. Residential real estate loans and lending commitments are primarily extended to wealth management clients and to clients who warehouse assets that are directly or indirectly secured by residential real estate. In addition, residential real estate includes loans purchased by us.
The table below presents our credit exposure from residential real estate loans and lending commitments, and the concentration by region, internally determined public rating agency equivalents and other credit metrics.
$ in millions
Loans
Lending
Commitments
Total
As of December 2025
Residential Real Estate
Region
Americas
EMEA
Asia
Total
Credit Quality (Credit Rating Equivalent)
Investment-grade
Non-investment-grade
Other metrics
Total
As of December 2024
Residential Real Estate
Region
Americas
EMEA
Asia
Total
Credit Quality (Credit Rating Equivalent)
Investment-grade
Non-investment-grade
Other metrics
Unrated
Total
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
In the table above:
• Credit exposure included loans and lending commitments of $18.40 billion as of December 2025 and $14.35 billion as of December 2024 which are extended to clients who warehouse assets that are directly or indirectly secured by residential real estate.
• Substantially all residential real estate loans included in the other metrics category consists of loans extended to wealth management clients. As of both December 2025 and December 2024, substantially all of such loans had a loan-to-value ratio of less than 80% and were performing in accordance with the contractual terms. Additionally, as of both December 2025 and December 2024, the vast majority of such loans had a FICO credit score of greater than 740.
In addition, we also have credit exposure to residential real estate loans held for securitization of $11.62 billion as of December 2025 and $10.18 billion as of December 2024. Such loans are included in trading assets in our consolidated balance sheets.
Securities-Based. Securities-based includes loans and lending commitments that are secured by stocks, bonds, mutual funds, and exchange-traded funds. These loans and commitments are primarily extended to our wealth management clients and used for purposes other than purchasing, carrying or trading margin stocks. Securities-based loans require borrowers to post additional collateral on a daily basis (daily margin requirement) based on changes in the underlying collateral’s fair value.
The table below presents our credit exposure from securities-based loans and lending commitments, and the concentration by region, internally determined public rating agency equivalents and other credit metrics.
$ in millions
Loans
Lending
Commitments
Total
As of December 2025
Securities-based
Region
Americas
EMEA
Total
Credit Quality (Credit Rating Equivalent)
Investment-grade
Non-investment-grade
Other metrics
Total
As of December 2024
Securities-based
Region
Americas
EMEA
Total
Credit Quality (Credit Rating Equivalent)
Investment-grade
Non-investment-grade
Other metrics
Total
In the table above, the vast majority of securities-based loans included in the other metrics category had a loan-to-value ratio of less than 80% and were performing in accordance with the contractual terms as of both December 2025 and December 2024.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Other Collateralized. Other collateralized includes loans and lending commitments that are backed by specific collateral (other than securities-based loans where there is a daily margin requirement and real estate loans). Such loans and lending commitments include loans to investment funds (managed by third parties) that are collateralized by capital commitments of the funds’ investors or assets held by the fund. Other collateralized also includes loans and lending commitments extended to clients who warehouse assets (that are directly or indirectly secured by corporate loans, consumer loans and other assets), as well as other secured loans and lending commitments extended to our wealth management and corporate clients.
The table below presents our credit exposure from other collateralized loans and lending commitments, and the concentration by region, internally determined public rating agency equivalents and other credit metrics.
$ in millions
Loans
Lending
Commitments
Total
As of December 2025
Other Collateralized
Region
Americas
EMEA
Asia
Total
Credit Quality (Credit Rating Equivalent)
Investment-grade
Non-investment-grade
Other metrics
Total
As of December 2024
Other Collateralized
Region
Americas
EMEA
Asia
Total
Credit Quality (Credit Rating Equivalent)
Investment-grade
Non-investment-grade
Other metrics
Unrated
Total
In the table above, credit exposure included loans and lending commitments extended to clients who warehouse assets of $34.28 billion as of December 2025 and $31.67 billion as of December 2024.
Credit Card Loans. We provide credit card loans (pursuant to revolving lines of credit) to consumers in the Americas. The credit card lines are cancellable by us and therefore do not result in credit exposure. In December 2025, we transferred the Apple Card loan portfolio of $21.26 billion ($19.74 billion after markdowns) to held for sale. See Note 9 to the consolidated financial statements for further information.
Other. Other primarily includes unsecured loans and lending commitments extended to wealth management clients and unsecured consumer loans purchased by us.
The table below presents our credit exposure from other loans and lending commitments, and the concentration by region, internally determined public rating agency equivalents and other credit metrics.
$ in millions
Loans
Lending
Commitments
Total
As of December 2025
Other
Region
Americas
EMEA
Total
Credit Quality (Credit Rating Equivalent)
Investment-grade
Non-investment-grade
Other metrics
Unrated
Total
As of December 2024
Other
Region
Americas
EMEA
Total
Credit Quality (Credit Rating Equivalent)
Investment-grade
Non-investment-grade
Other metrics
Total
In the table above, other metrics primarily includes consumer and credit card loans purchased by us. Our risk assessment process for such loans includes reviewing certain key metrics, such as expected cash flows, delinquency status and other risk factors.
In addition, we also have credit exposure to other loans held for securitization of $2.14 billion as of December 2025 and $1.22 billion as of December 2024. Such loans are included in trading assets in our consolidated balance sheets.
Credit Hedges. We seek to mitigate the credit risk associated with our lending activities by obtaining credit protection on certain loans and lending commitments through credit default swaps, both single-name and index-based contracts, and through the issuance of credit-linked notes.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Securities Financing Transactions. We enter into securities financing transactions in order to, among other things, facilitate client activities, invest excess cash, acquire securities to cover short positions and finance certain activities. We bear credit risk related to resale agreements and securities borrowed only to the extent that cash advanced or the value of securities pledged or delivered to the counterparty exceeds the value of the collateral received. We also have credit exposure on repurchase agreements and securities loaned to the extent that the value of securities pledged or delivered to the counterparty for these transactions exceeds the amount of cash or collateral received. Securities collateral for these transactions primarily includes U.S. and non-U.S. government and agency obligations.
The table below presents our credit exposure from securities financing transactions and the concentration by industry, region and internally determined public rating agency equivalents.
As of December
$ in millions
Securities Financing Transactions
Industry
Financial Institutions
Funds
Municipalities & Nonprofit
Sovereign
Total
Region
Americas
EMEA
Asia
Total
Credit Quality (Credit Rating Equivalent)
AAA
BBB
BB or lower
Total
The table above reflects both netting agreements and collateral that we consider when determining credit risk.
Other Credit Exposures. We are exposed to credit risk from our receivables from brokers, dealers and clearing organizations and customers and counterparties. Receivables from brokers, dealers and clearing organizations primarily consist of initial margin placed with clearing organizations and receivables related to sales of securities which have traded, but not yet settled. These receivables generally have minimal credit risk due to the low probability of clearing organization default and the short-term nature of receivables related to securities settlements. Receivables from customers and counterparties generally consist of collateralized receivables related to customer securities transactions and generally have minimal credit risk due to both the value of the collateral received and the short-term nature of these receivables.
The table below presents our other credit exposures and the concentration by industry, region and internally determined public rating agency equivalents.
As of December
$ in millions
Other Credit Exposures
Industry
Financial Institutions
Funds
Other (including Special Purpose Vehicles)
Total
Region
Americas
EMEA
Asia
Total
Credit Quality (Credit Rating Equivalent)
AAA
BBB
BB or lower
Unrated
Total
The table above reflects collateral that we consider when determining credit risk.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Selected Exposures
We have credit and market exposures, as described below, that have had heightened focus given recent events and broad market concerns. Credit exposure represents the potential for loss due to the default or deterioration in credit quality of a counterparty or borrower. Market exposure represents the potential for loss in value of our long and short positions due to changes in market prices.
Country Exposures. The Russian invasion of Ukraine has negatively affected the global economy and increased macroeconomic uncertainty. Our total credit exposure to Ukrainian counterparties or borrowers was not material as of December 2025. Our total market exposure relating to Ukrainian issuers as of December 2025 was $123 million, and was primarily related to sovereign debt. Our credit exposure to Russian counterparties or borrowers and our market exposure to Russian issuers were not material as of December 2025. See “Risk Factors” in Part I, Item 1A of this Form 10-K for further information about our risks related to Russia’s invasion of Ukraine.
In addition, economic and/or political unc ertainties in Lebanon and Venezuela have led to concerns about their financial stability. Our credit exposure to counterparties or borrowers and our market exposure to issuers relating to each of these countries was not material as of December 2025.
We have a comprehensive framework to monitor, measure and assess our country exposures and to determine our risk appetite. We determine the country of risk by the location of the counterparty, issuer’s assets, where they generate revenue, the country in which they are headquartered, the jurisdiction where a claim against them could be enforced, and/or the government whose policies affect their ability to repay their obligations. We monitor our credit exposure to a specific country both at the individual counterparty level, as well as at the aggregate country level. See “Stress Tests” for information about stress tests that are designed to estimate the direct and indirect impact of events involving the above countries.
Operational Risk Management
Overview
Operational risk is the risk of an adverse outcome resulting from inadequate or failed internal processes, people, systems or from external events. Our exposure to operational risk arises from routine processing errors, as well as extraordinary incidents, such as major systems failures or legal and regulatory matters, that could occur for us or our third-party vendors.
Potential types of loss events related to internal and external operational risk include:
• Execution, delivery and process management;
• Business disruption and system failures;
• Employment practices and workplace safety;
• Clients, products and business practices;
• Third-party risk, including vendor risk;
• Damage to physical assets;
• Internal fraud; and
• External fraud.
Operational Risk, which is part of our second line of defense and reports to our chief risk officer, has primary responsibility for developing and implementing a formalized framework for independently assessing, monitoring and managing operational risk to support firmwide review and challenge of our global businesses, with the goal of maintaining our exposure to operational risk at levels that are within our risk appetite.
Operational Risk Management Process
Our process for managing operational risk includes the critical components of our risk management framework described in the “Overview and Structure of Risk Management,” including a comprehensive data collection process, as well as firmwide policies and procedures, for operational risk events.
We combine top-down and bottom-up approaches to manage and measure operational risk. From a top-down perspective, our senior management assesses firmwide and business-level operational risk profiles. From a bottom-up perspective, our first and second lines of defense are responsible for risk identification and risk management on a day-to-day basis, including escalating operational risks and risk events to senior management.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
We seek to maintain a comprehensive control framework designed to provide a well-controlled environment to minimize operational risks. The Firmwide Compliance and Operational Risk Committee is responsible for overseeing compliance and operational risk for our business.
Our operational risk management framework is designed to comply with the operational risk measurement rules under the Capital Framework and has evolved based on the changing needs of our businesses and regulatory guidance.
We have established policies that require all employees and consultants to report and escalate operational risk events. When operational risk events are identified, our policies require that the events be documented and analyzed to determine whether changes are required in our systems and/or processes to further mitigate the risk of future events.
We use operational risk management applications to capture, analyze, aggregate and report operational risk event data and key metrics. One of our key risk identification and control assessment tools is an operational risk and control self-assessment process, which is performed by our managers. This process consists of the identification and rating of operational risks, on a forward-looking basis, and the related controls. The results from this process are analyzed to evaluate operational risk exposures and identify businesses, activities or products with heightened levels of operational risk.
Risk Measurement
We measure our operational risk exposure using both statistical modeling and scenario analyses, which involve qualitative and quantitative assessments of internal and external operational risk event data and internal control factors for each of our businesses. Operational risk measurement also incorporates an assessment of business environment factors, including:
• Evaluations of the complexity of our business activities;
• The degree of automation in our processes;
• New activity information;
• The legal and regulatory environment; and
• Changes in the markets for our products and services, including the diversity and sophistication of our customers and counterparties.
The results from these scenario analyses are used to monitor changes in operational risk and to determine business lines that may have heightened exposure to operational risk. We also perform firmwide stress tests. See “Overview and Structure of Risk Management” for information about firmwide stress tests.
Types of Operational Risks
Increased reliance on technology and third-party relationships has resulted in increased operational risks, such as third-party risk, business resilience risk and cybersecurity risk. See “Cybersecurity Risk Management” for information about our cybersecurity risk management process. We manage third-party and business resilience risks as follows:
Third-Party Risk. Third-party risk, including vendor risk, is the risk of an adverse impact due to reliance on third parties performing services or activities on our behalf. These risks may include legal, regulatory, information security, cybersecurity, reputational, operational or other risks inherent in engaging a third party. We identify, manage and report key third-party risks and conduct due diligence across multiple risk domains, including information security and cybersecurity, resilience and additional supply chain dependencies. We evaluate whether vendors design, implement, and maintain information security controls consistent with our security policies and standards. Vendors that access and process our information on their infrastructure external to our network are required to undergo an initial risk assessment, resulting in the assignment of a vendor inherent risk rating that is determined based on a number of factors, including the type of data stored and processed by a particular vendor. Subsequently, we conduct re-certifications at a depth and frequency that is commensurate with each vendor’s inherent risk rating as a component of our risk-based approach to vendor oversight. Vendors are required to agree to standard contractual provisions before receiving sensitive information from us. These provisions have specific information security control requirements, which apply to vendors that store, access, transmit or otherwise process sensitive information on our behalf. The Third-Party Risk Program monitors, reviews and reassesses third-party risks on an ongoing basis. See “Risk Factors” in Part I, Item 1A of this Form 10-K for further information about third-party risk.
Business Resilience Risk. Business resilience risk is the risk of disruption to our critical processes. We monitor threats and assess risks and seek to ensure our state of readiness in the event of a significant operational disruption to the normal operations of our critical functions or their dependencies, such as critical facilities, systems, third parties, data and/or personnel. Our resilience framework defines the fundamental principles for BCP and crisis management to ensure that critical functions can continue to operate in the event of a disruption. We seek to maintain a business continuity program that is comprehensive, consistent on a firmwide basis, and up-to-date, incorporating new information, including resilience capabilities. Our resilience assurance program encompasses testing of response and recovery strategies on a regular basis with the objective of minimizing and preventing significant operational disruptions. See “Business — Business Continuity and Information Security” in Part I, Item 1 of this Form 10-K for further information about business continuity.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Cybersecurity Risk Management
Overview
Cybersecurity risk is the risk of compromising the confidentiality, integrity or availability of our data and systems, leading to an adverse impact to us, our reputation, our clients and/or the broader financial system. We seek to minimize the occurrence and impact of unauthorized access, disruption or use of information and/or information systems. We deploy and operate preventive and detective controls and processes to mitigate emerging and evolving information security and cybersecurity threats, including monitoring our network for known vulnerabilities and signs of unauthorized attempts to access our data and systems. There is increased information risk through diversification of our data across external service providers, including use of a variety of cloud-provided or -hosted services and applications. In addition, new AI technologies may increase the frequency and severity of cybersecurity attacks. See “Risk Factors” in Part I, Item 1A of this Form 10-K for further information about information and cybersecurity risk.
Cybersecurity Risk Management Process
Our cybersecurity risk management processes are integrated into our overall risk management processes described in the “Overview and Structure of Risk Management.” We have established an Information Security and Cybersecurity Program (the Cybersecurity Program), administered by Technology Risk within Engineering, and overseen by our CISO. This program is designed to identify, assess, document and mitigate threats, govern, establish and evaluate compliance with information security mandates, adopt and apply our security control framework, and prevent, detect and respond to security incidents. The Cybersecurity Program is periodically reviewed and modified to respond to changing threats and conditions. A dedicated Operational Risk team, which reports to the chief risk officer, provides oversight and challenge of the Cybersecurity Program, independent of Technology Risk, and assesses the operating effectiveness of the program against industry standard frameworks and Board risk appetite-approved operational risk limits and thresholds.
Our process for managing cybersecurity risk includes the critical components of our risk management framework described in the “Overview and Structure of Risk Management,” as well as the following:
• Training and education, to enable our people to recognize information and cybersecurity threats and respond accordingly;
• Identity and access management, including entitlement management and production access;
• Application and software security, including software change management, open source software, and backup and restoration;
• Infrastructure security, including monitoring our network for known vulnerabilities and signs of unauthorized attempts to access our data and systems;
• Mobile security, including mobile applications;
• Data security, including cryptography and encryption, database security, data erasure and media disposal;
• Cloud computing, including governance and security of cloud applications, and software-as-a-service data onboarding;
• Technology operations, including change management, incident management, capacity and resilience; and
• Third-party risk management, including vendor management and governance, and cybersecurity and business resiliency on vendor assessments.
In conjunction with third-party vendors and consultants , we perform risk assessments to gauge the performance of the Cybersecurity Program, to estimate our risk profile and to assess compliance with relevant regulatory requirements. We perform periodic assessments of control efficacy through our internal risk and control self-assessment process, as well as a variety of external technical assessments, including external penetration tests and “red team” engagements where third parties test our defenses. The results of these risk assessments, together with control performance findings, are used to establish priorities, allocate resources, and identify and improve controls. We use third parties, such as outside forensics firms, to augment our cyber incident response capabilities. We have a vendor management program that documents a risk-based framework for managing third-party vendor relationships. Information security risk management is built into our vendor management process, which covers vendor selection, onboarding, performance monitoring and risk management. See “Third-Party Risk” for further information about vendor risk.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
During 2025, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition. Technology Risk monitors cybersecurity threats and risks from information security and cybersecurity matters on an ongoing basis, and allocates resources and directs operations in a manner designed to mitigate those risks. For example, in response to the proliferation of AI-enabled fraud and ransomware attacks that continue to be reported globally, we have emphasized phishing and cybersecurity training for our employees and allocated additional resources for business continuity. However, despite these efforts, we cannot eliminate all cybersecurity risks or provide assurances that we have not had occurrences of undetected cybersecurity incidents.
Governance
The Board , both directly and through its committees, including its Risk Committee and Technology Risk Subcommittee, oversees our risk management policies and practices, including cybersecurity risks, and information security and cybersecurity matters. Our chief risk officer, chief information officer and chief technology officer, among others, periodically brief the Board on operational and technology risks, including cybersecurity risks, relevant to us. The Board also receives regular briefings from our CISO on a range of cybersecurity-related topics, including the status of our Cybersecurity Program, emerging cybersecurity threats, mitigation strategies and related regulatory engagements. In addition, these are topics on which various directors maintain an ongoing dialogue with our CISO, chief information officer and chief technology officer.
Our CISO is responsible for managing and implementing the Cybersecurity Program and reports directly to our chief information officer. Our CISO oversees our Technology Risk team, which assesses and manages material risks from cybersecurity threats, sets firmwide control requirements, assesses adherence to controls, and oversees incident detection and response.
In addition, we have a series of committees and steering groups that oversee the implementation of our cybersecurity risk management strategy and framework. These committees and steering groups are informed about cybersecurity incidents and risks by designated members of Technology Risk, who periodically report to these committees and steering groups about the Cybersecurity Program, including the efforts of the Technology Risk teams to prevent, detect, mitigate and remediate incidents and threats. These committees and steering groups enable formal escalation and reporting of risks, and our CISO and other members of Technology Risk provide regular briefings to senior management.
The Firmwide Technology Risk Committee is responsible for reviewing matters related to the design, development, deployment and use of technology. This committee oversees cybersecurity matters, as well as technology risk management frameworks and methodologies, and monitors their effectiveness. This committee is co-chaired by our CISO and our chief technology officer, and reports to the Firmwide Enterprise Risk Committee. To assist the Firmwide Technology Risk Committee in carrying out its mandate, the Firmwide Artificial Intelligence Risk and Controls Committee, which oversees risks associated with the use of AI, reports to the Firmwide Technology Risk Committee .
The Digital Risk Office Steering Group oversees Engineering risk decisions, monitors control performance and reviews approaches to comply with current and emerging regulation applicable to Engineering. This steering group is chaired by our chief digital risk officer and reports to the Firmwide Technology Risk Committee.
Our CISO, senior management within Technology Risk and Operational Risk, as well as management personnel overseeing the Cybersecurity Program, all have substantial relevant expertise in the areas of information security and cybersecurity risk management.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Model Risk Management
Overview
Model risk is the potential for adverse consequences from decisions made based on model outputs that may be incorrect or used inappropriately. We rely on quantitative models across our business activities primarily to value certain financial assets and liabilities, to monitor and manage our risk, and to measure and monitor our regulatory capital.
Model Risk, which is part of our second line of defense, is independent of our model developers, model owners and model users, and reports to our chief risk officer, has primary responsibility for independently assessing, monitoring and managing our model risk by providing firmwide review and challenge across our global businesses.
Our model risk management framework is managed through a governance structure and risk management controls, which encompass standards designed to ensure we maintain a comprehensive model inventory, including risk assessment and classification, sound model development practices, independent review and model-specific usage controls. The Firmwide Model Risk Control Committee oversees our model risk management framework.
Model Review and Validation Process
Model Risk consists of quantitative professionals who perform an independent review, validation and approval of our models. This review includes an analysis of the model documentation, independent testing, an assessment of the appropriateness of the methodology used, and verification of compliance with model development and implementation standards.
We regularly refine and enhance our models to reflect changes in market or economic conditions and our business mix. All models are reviewed on an annual basis, and new models or significant changes to existing models and their assumptions are approved prior to implementation.
The model validation process incorporates a review of models and trade and risk parameters across a broad range of scenarios (including extreme conditions) in order to critically evaluate and verify:
• The model’s conceptual soundness, including the reasonableness of model assumptions, and suitability for intended use;
• The testing strategy utilized by the model developers to ensure that the models function as intended;
• The suitability of the calculation techniques incorporated in the model;
• The model’s accuracy in reflecting the characteristics of the related product and its significant risks;
• The model’s consistency with models for similar products; and
• The model’s sensitivity to input parameters and assumptions.
See “Critical Accounting Policy — Fair Value — Review of Valuation Models,” “Liquidity Risk Management,” “Market Risk Management,” “Credit Risk Management” and “Operational Risk Management” for further information about our use of models within these areas.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Other Risk Management
In addition to the areas of risks discussed above, we also manage other risks, including capital, climate, compliance, conflicts and reputational. These areas of risks are discussed below.
Capital Risk Management
Capital risk is the risk that our capital is insufficient to support our business activities under normal and stressed market conditions or we face capital reductions or RWA increases, including from new or revised rules or changes in interpretations of existing rules, and are therefore unable to meet our internal capital targets or external regulatory capital requirements. Capital adequacy is of critical importance to us. We have in place a comprehensive capital management policy that provides a framework, defines objectives and establishes guidelines to assist us in maintaining the appropriate level and composition of capital in both business-as-usual and stressed conditions. Our capital management framework is designed to provide us with the information needed to identify and comprehensively manage risk, and develop and apply projected stress scenarios that capture idiosyncratic vulnerabilities with a goal of holding sufficient capital to remain adequately capitalized even after experiencing a severe stress event. See “Capital Management and Regulatory Capital” for further information about our capital management process.
We have established a comprehensive governance structure to manage and oversee our day-to-day capital management activities and to ensure compliance with capital rules and related policies. Our capital management activities are overseen by the Board and its committees. The Board is responsible for approving our annual capital plan and the Risk Committee of the Board approves our capital management policy, which details the risk committees and members of senior management who are responsible for the ongoing monitoring of our capital adequacy and evaluation of current and future regulatory capital requirements, the review of the results of our capital planning and stress tests processes, and the results of our capital models. In addition, our risk committees and senior management are responsible for the review of our contingency capital plan, key capital adequacy metrics, including regulatory capital ratios, and capital plan metrics, such as the payout ratio, as well as monitoring capital targets and potential breaches of capital requirements.
Our process for managing capital risk also includes independent oversight by Risk that assesses our capital management framework, regulatory capital policies and related interpretations and escalates certain interpretations to senior management and/or the appropriate risk committee. This oversight includes, among other things, independent review and challenge of our capital ratio targets, planned capital actions and regulatory capital calculations; analysis of the related documentation; independent testing; and an assessment of the appropriateness of the calculations and their alignment with the relevant regulatory capital rules.
Climate-Related and Environmental Risk Management
Climate-related and environmental risks manifest in different ways across our businesses. We categorize climate-related risks into physical risk and transition risk. Physical risk is the risk that asset values may decline or operations may be disrupted as a result of changes in the climate, while transition risk is the risk that asset values may decline because of changes in climate policies or changes in the underlying economy due to decarbonization.
Oversight of climate-related and environmental risks is integrated into our risk management processes and governance structure, from our Board and its committees to our senior management. The Board and its committees, as part of their oversight, receive updates on our risk management approach to climate risk, including our approaches towards managing physical and transition risks. Senior management within Risk, in coordination with senior management in our revenue-producing units, is responsible for the development of the climate-related and environmental risk management program. The objective of this program is to integrate climate-related and environmental risks into existing risk disciplines and business considerations, such as the integration of climate risk into our credit evaluation and underwriting processes for select industries.
See “Business — Sustainability” in Part I, Item 1 and “Risk Factors” in Part I, Item 1A of this Form 10-K for information about our sustainability initiatives, including in relation to climate transition.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
Compliance Risk Management
Compliance risk is the risk of legal or regulatory sanctions, material financial loss or damage to our reputation arising from our failure to comply with the requirements of applicable laws, rules and regulations, and our internal policies and procedures. Compliance risk is inherent in all activities through which we conduct our businesses. Our Compliance Risk Management Program, administered by Compliance, assesses our compliance, regulatory and reputational risk; monitors for compliance with new or amended laws, rules and regulations; designs and implements controls, policies, procedures and training; conducts independent testing; investigates, surveils and monitors for compliance risks and breaches; and is a key participant in regulatory examinations, audits and inquiries. We monitor and review business practices to assess whether they meet or exceed minimum regulatory and legal standards in all markets and jurisdictions in which we conduct business.
Conflicts Management
Conflicts of interest and our approach to dealing with them are fundamental to our client relationships, our reputation and our long-term success. The term “conflict of interest” does not have a universally accepted meaning, and conflicts can arise in many forms within a business or between businesses. The responsibility for identifying potential conflicts, as well as complying with our policies and procedures, is shared by all of our employees.
We have a multilayered approach to resolving conflicts and addressing reputational risk. Our senior management oversees policies related to conflicts resolution and, in conjunction with Conflicts Resolution, Legal and Compliance, and internal committees, formulates policies, standards and principles, and assists in making judgments regarding the appropriate resolution of particular conflicts. Resolving potential conflicts necessarily depends on the facts and circumstances of a particular situation and the application of experienced and informed judgment.
As a general matter, Conflicts Resolution reviews financing and advisory assignments in Global Banking & Markets and certain of our investing, lending and other activities. In addition, we have various transaction oversight committees that also review new underwritings, loans, investments and structured products. These groups and committees work with internal and external counsel and Compliance to evaluate and address any actual or potential conflicts. The head of Conflicts Resolution reports to our chief legal officer, who reports to our chief executive officer.
We regularly assess our policies and procedures that address conflicts of interest in an effort to conduct our business in accordance with the highest ethical standards and in compliance with all applicable laws, rules and regulations.
Reputational Risk Management
Reputational risk is the potential risk that negative publicity regarding our business practices, whether true or not, will cause a decline in our customer base, costly litigation or revenue reductions. Our reputation is critical to effectively serving our clients and fostering and maintaining long-term client relationships, and it is integral to how we are viewed by our key stakeholders.
In evaluating business opportunities, reputational risk is one of the most significant components we consider. We evaluate the ethics, suitability and transparency of transactions undertaken by us. Our employees are responsible for considering the reputational impacts that our business activities may have.
We have implemented a comprehensive program designed to monitor reputational risk. The Firmwide Reputational Risk Committee, which reports into the Firmwide Enterprise Risk Committee, is responsible for assessing reputational risks arising from business opportunities that have been identified as having potential heightened reputational risk. This committee is also responsible for overseeing client-related business standards and addressing client-related reputational risk and considers, among other things, the potential effects any business opportunities, products, transactions, new activities, acquisitions, dispositions or investments could have on our reputation.
For further information about our risk management processes, see “Overview and Structure of Risk Management” and “Risk Factors” in Part I, Item 1A of this Form 10-K.
Goldman Sachs 2025 Form 10-K
THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
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- Ticker
- GS
- CIK
0000886982- Form Type
- 10-K
- Accession Number
0000886982-26-000091- Filed
- Feb 25, 2026
- Period
- Dec 31, 2025 (Q4 25)
- Industry
- Security Brokers, Dealers & Flotation Companies
External resources
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