Denis Coleman: Good morning.
Betsy Graseck: Two questions. One follow-up on the consumer business, I heard you on the markets pull back, you’re going to see originating there. Does that give you more room to lean into growth and we should expect acceleration and the partner card GreenSky, those pieces that you are keeping or is this market pullback going to feed either capital increase or the ability to lean in other business lines like the ISG business?
Denis Coleman: Sure. Betsy, it’s Denis. I’ll start with that. So as we indicated, we’re going to cease the originations in under Marcus lending. And then furthermore, expect for that portfolio actually to roll off or we may pursue other alternatives. That should free up a bunch of financial resources. We’re continued within the overall asset and wealth management segment where the deposit business is resident within the private banking and lending line. That remains a strategic priority for the firm, and we’ve experienced very good growth there. That business is achieving more and more scale. So that will remain an ongoing focus. I think once we have reduced some of the resourcing allocated to markets and lending, we will continue to narrow the focus of our ambitions and our investment spend.
And within the Platform Solutions business, we’re now down to three different businesses: transaction banking, the cards platform and our point-of-sale lending business, GreenSky. And our focus is really on just narrowing to drive those businesses across the segment to profitability.
Betsy Graseck: Okay. Then separate question just on the expenses in this quarter. I know you had the action of the headcount reduction. Is there a severance embedded in this quarter that we should strip out because, obviously, it’s not ongoing? Or does that hit 1Q? Maybe you could speak to how we should think about that? Thanks.
Denis Coleman: Sure. Thanks, Betsy. Because we communicated the reductions in 2023, any associated severance expense associated with those reductions will be 2023 expenses.
Betsy Graseck: Okay, thanks.
Operator: Thank you. We will take our next question from Mike Mayo with Wells Fargo.
Mike Mayo: Hi. I have one. Dave, I think it’s your birthday today, right? You announced that a few years ago.
David Solomon: It is my birthday, and I couldn’t be happier to be on this call with you. But thank you. Thank you for that.
Mike Mayo: Well, since it’s your birthday, do you want the positive question or the negative question first.
David Solomon: You want €“ I’m happy to take any question. Any question that you have, Mike. You know that. We’re happy to take questions both positive and tough. I mean it wasn’t a great quarter. So I don’t expect all the questions to be easy.
Mike Mayo: Well, I mean, it is concerning in terms of the reorg, I mean we will get more at the Investor Day. And just a comment, I hope you give us more data. Here we have three new sectors, and you only gave us the prior four quarters and the prior 2 years without much detail. So I hope you give us more ahead. But the question is, you present the firm differently, but will the firm actually be run differently other than the more narrow focus on consumer?
David Solomon: Yes. And so I appreciate that. And to €“ two comments. First, just on the transparency and information comment, I think this management team, Mike, over the last 4.5 years has been super focused on increasing the transparency of Goldman Sachs, and we remain focused on that. If you have certain feedback on things you’d like to see, etcetera, we really welcome that, and Carey will reach out to you, and we will take that feedback. But we’re focused on giving our investors more and more and creating the right kind of transparency around what we’re doing. Second, on the evolution and the move to this, what I’d say, and this has been something that’s been a journey that we started a number of years ago, but the firm is now organized and presented externally the same way we run it internally.
And that candidly is a difference than the way Goldman Sachs has been during my tenure at the firm. In terms of our core business of banking and markets, there are synergies that we’ve been driving as these businesses cooperate that we think we can now get more out of in our client orientation across our broad franchise that this organization of those businesses together really helps. I highlight that we feel great about the performance of those businesses since our Investor Day. It’s long forgotten. But when we did our Investor Day, back in 2020, nobody believed that we could get the ROE of the markets business above 10%. That was a big question on the minds of investors. And we look now at our combined banking and markets business, this business, we think, is a leader.
It outperforms in terms of its market share and outperforms in terms of its returns relative to competitors, and we continue to grow it and continue to stay laser-focused on the client experience and also the returns and the performance of that business. We also think there continues to be opportunity to grow our financing business there, and we’re very, very focused on that. In asset and wealth management, we’ve worked hard to bring a number of businesses together into an integrated franchise so we can really have transparency and focus on our ability to grow management fees and drive performance and serve more clients in that business. And as we’ve said over the last few years, reduce the balance sheet intensity of that. And we’re on a journey.
Would I like it to be further along? Yes. If it was further along, there would have been less volatility, particularly in the context of this year in the fourth quarter. But we continue €“ that’s something we laid out 3 years ago, and we continue to move at that. The change strategically of a narrowing of our focus on certain things in consumer business, I think, is a change. We continue to feel very good about the deposit platform and the contribution it makes. We think our partnership with Apple will provide meaningful dividends for the firm over time. We think GreenSky is a good business that can be accretive, but the platforms are in a different stage of development than our other businesses. They are small in the overall scale of Goldman Sachs, but we think there are benefits to that for the firm.
We will communicate more as we move forward around that, but we’re making progress and we will continue to run that narrow focus in a way that we think can drive profitability. So that’s a high-level response. I don’t know if there is something else you want me to drill into, but that’s a high-level response.
