Diversification.
"We're pleased with our improved performance in the quarter as it demonstrates the earnings power of our diversified franchise and shows what is possible with modest improvements in the environment and client activity, and we believe there is room for additional revenue and earnings growth, as we further diversify our global franchise across a broader client base with an expanded suite of products and services."
The fixed income, currencies, and commodities business is diversified, Chavez said, adding at one point that Goldman Sachs is working to "improve, broaden, strengthen, diversify our engagement with clients."
What about equities? That's diversified too. Chavez said:
"We've got a franchise diversified across products and geographies and really, in the quarter, we saw the benefits of that. The performance was strong across flow and structured products, across cash and derivatives, across geographies and all the business lines: One Delta, derivatives and prime."
Let's not forget investing and lending, where the bank's global equity portfolio "remains well diversified with over 900 different investments." Or investment management, where the bank delivered record revenues "driven by our diversified Global Asset Management business and differentiated Private Wealth Management franchise."
And the bank's not finished yet, with Chavez saying Goldman will "continue to diversify our client footprint," and will continue to emphasize "producing higher revenues from more recurring sources such as investment management and lending, generating significant operating leverage and diversifying the long-term earnings profile of the firm."
As if to stress the point, Goldman Sachs included fo the first time a graphic on the bank's revenue mix in the quarterly earnings announcement.
Goldman Sachs
The point, of course, is to stress that Goldman Sachs has lots of opportunities for growth, and isn't dependent on any one single business. If investment banking is quiet, trading might kick in. If trading is quiet, investment management, or investing and lending, might deliver. And then there's the bank's consumer lending efforts.
That's especially necessary after a multi-year stretch where Goldman Sachs' vaunted fixed income, currencies, and commodities business misfired. It also helps justify Goldman Sachs' decision to pause buybacks for the second quarter, with Chavez saying the bank will use earnings to support future investments.
At one point, Evercore ISI analyst Glenn Schorr asked about the full suite of products Goldman Sachs is rolling out to companies. Chavez rattled off a handful:
- "In FICC, we've increased our corporate derivative mandates."
- "In equities, as I touched on before, we've been on-boarding clients, continuing to invest in execution services and infrastructure."
- "In Investment Banking, we've assigned coverage on over 500 of the 1,000 targeted clients and you have seen announcements of a number of senior bankers who've joined us recently."
- "And also to say a little bit on Marcus, the funded loan balance is about $2.4 billion, originations through the end of the first quarter life-to-date approximately $3 billion."
"Okay. So you're not doing much," Schorr said. "I'm kidding."