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 , (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 capital buffer (SCB) and global systemically important bank (G-SIB) surcharge, (xvii) legal proceedings, governmental 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 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 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, 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 the allowance for loan when deemed to be .
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 in an macroeconomic environment may differ significantly from this estimate. See Note 9 to the consolidated financial statements for further information about the allowance for credit .
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 period of 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 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 , 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
