Morningstar DBRS Confirms Goldman Sachs' Long-Term Issuer Rating at A (high), Stable Trend

DBRS, Inc. (Morningstar DBRS) confirmed the credit ratings of The Goldman Sachs Group, Inc. (Goldman or the Company), including the Company's Long-Term Issuer Rating of A (high) and Short-Term Issuer Rating of R-1 (middle). The trend on all credit ratings is Stable. The Intrinsic Assessment (IA) for Goldman is AA (low) while its Support Assessment remains SA3, meaning that timely systemic support is not expected. The Company's Long-Term Issuer Rating is positioned one notch below the IA.

KEY CREDIT RATING CONSIDERATIONS
The credit rating confirmations and Stable trends reflect Goldman's leading market positions across all its major businesses as well as its preeminent risk management, top-tier profitability metrics, and strong balance sheet fundamentals. Morningstar DBRS recognizes the considerable progress Goldman has achieved in executing its strategic priorities. The credit ratings also consider Goldman's exposure to a wide range of trading and investing activities that are integral to the value of its franchise but also contribute to a notable level of market risk that characterizes the Company's risk profile.

Goldman's IA of AA (low) has been assigned at the low point of the IA range, which Morningstar DBRS views as appropriate, given the Company's exposure to capital markets activities and related revenue volatility.

CREDIT RATING DRIVERS
Over the longer term, if Goldman delivers sustained improvement in the stability of its earnings while maintaining its top-tier profitability metrics and strong credit profile, the credit ratings would be upgraded. Conversely, a sustained deterioration in earnings or balance sheet fundamentals would result in a credit rating downgrade. Any indication of significant weakening in Goldman's franchise because of reputational issues, risk management deficiencies, or operational missteps would also result in a credit rating downgrade.

CREDIT RATING RATIONALE
Franchise Combined Building Block Assessment: Very Strong
Goldman's core franchises remain very strong. The Company's Investment Banking franchise includes a dominant Financial Advisory business that has generated the most revenue globally for more than 20 years running and a global-leading Equity Underwriting platform. In addition, Goldman has made significant market share gains over the past decade in Debt Underwriting, establishing a top three position globally.

Goldman has a top two Sales and Trading franchise in Fixed Income, Currency, and Commodities (FICC) and Equities. While these businesses are capital intensive and contribute a notable amount of market risk and revenue volatility, they can still generate a substantial amount of revenue even during adverse market conditions, as evidenced by the Company's results during the pandemic.

Goldman's Asset & Wealth Management business comprises a leading global active asset manager, a top five alternative asset manager, and a leading ultra-high-net-worth Wealth Management business. Collectively, this business has nearly $3.2 trillion in assets under supervision, providing stability to earnings.

Earnings Combined Building Block Assessment: Strong/Good
Goldman's consistent top-tier through-the-cycle profitability metrics provide key support to the credit ratings. In 2024, Goldman generated $54 billion in net revenue, which was up 16% from the prior year, reflecting momentum across businesses. For the full year, Goldman reported a return on equity (ROE) of 12.7%, which Morningstar DBRS views favorably in the context of the operating environment. More recently, the Company delivered a strong ROE of 16.9% in Q1 2025, driven by record net revenues in Equities and another strong performance in FICC.

Risk Combined Building Block Assessment: Strong/Good
Given Goldman's extensive exposure to market risk and the risks related to its involvement in capital markets activities, Morningstar DBRS views Goldman's effective risk management capabilities and cohesive culture as key underpinnings to the Company's credit ratings. Notably, the Company uses a single integrated, flexible technology system for risk management, which has benefited Goldman when adjusting to changes and the evolving environment. These capabilities enable the Company to address the challenges of ensuring effective management while retaining the streamlined organizational structure that helps keep Goldman efficient and nimble.

Funding and Liquidity Combined Building Block Assessment: Strong
Goldman has a comprehensive framework in place to manage its funding and liquidity needs. Morningstar DBRS views favorably the Company's diversified funding profile, including sustained growth in its deposit base, which is now its largest source of funding, representing more than a third of its funding mix. Goldman maintains a substantial amount of liquidity, with global core liquid assets averaging $441 billion during Q1 2025, representing a quarter of total assets.

Capitalization Combined Building Block Assessment: Strong
Goldman's capital metrics remain robust even with ongoing capital returns to shareholders. In 2024, the Company returned $11.8 billion of capital to shareholders, including $8.0 billion of share repurchases and $3.8 billion of dividends. At the end of Q1 2025, Goldman's Standardized CET1 ratio stood at 14.8%, or about 110 basis points above its regulatory requirement.

Further details on the Scorecard Indicators and Building Block Assessments can be found at https://dbrs.morningstar.com/research/454573.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS
There were no Environmental/ Social/ Governance factors that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025) at https://dbrs.morningstar.com/research/454196.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is the Global Methodology for Rating Banks and Banking Organisations (June 4, 2024), https://dbrs.morningstar.com/research/433881. In addition Morningstar DBRS uses the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings (May 16, 2025), https://dbrs.morningstar.com/research/454196 in its consideration of ESG factors.

The following methodology has also been applied:
-- Morningstar DBRS Global Corporate Criteria (February 3, 2025), https://dbrs.morningstar.com/research/447186

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

The primary sources of information used for these credit ratings include Morningstar, Inc. and company documents. Morningstar DBRS considers the information available to it for the purposes of providing these credit ratings was of satisfactory quality.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to our Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of our website.

These credit ratings are endorsed by DBRS Ratings Limited for use in the United Kingdom, and by DBRS Ratings GmbH for use in the European Union, respectively. The following additional regulatory disclosures apply to endorsed credit ratings:

The last credit rating action on this issuer took place on May 23, 2024.

The conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS's outlooks and credit ratings are monitored.

For further information on Morningstar DBRS historical default rates published by the European Securities and Markets Authority (ESMA) in a central repository, see: https://registers.esma.europa.eu/cerep-publication. For further information on Morningstar DBRS historical default rates published by the Financial Conduct Authority (FCA) in a central repository, see https://data.fca.org.uk/#/ceres/craStats.

Lead Analyst: Michael McTamney, CFA, Senior Vice President,
Rating Committee Chair: Timothey O'Brien, Managing Director,
Initial Rating Date: October 29, 1999

For more information on this credit or on this industry, visit dbrs.morningstar.com.