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Goldman Sachs Q2 2025: Unraveling Contradictions in Capital Allocation, M&A Strategy, and Client Activity
Generated by AI AgentEarnings Decrypt
Wednesday, Jul 16, 2025 5:09 pm ET1min read
Aime SummaryCapital allocation and shareholder returns, regulatory changes and capital allocation, M&A activity and strategy, capital allocation and regulatory environment, impact of volatility on client activity are the key contradictions discussed in Goldman Sachs's latest 2025Q2 earnings call.
Strong Financial Performance:
- reported net revenues of $14.6 billion for the second quarter of 2025, with earnings per share of $10.91 and a ROE of 12.8%.
- The growth was driven by strong performance in investment banking, financing, risk intermediation, and asset and wealth management.
Investment Banking Leadership:
- Global Banking and Markets revenues were $10.1 billion in the second quarter, with an ROE of nearly 18% for the first half of the year.
- The company remains #1 in league tables for M&A with a lead of roughly $85 billion in announced volume and $145 billion in completed volumes.
- The increase in advisory revenues reflects strength in the Americas and EMEA, with equity underwriting revenues of $428 million and debt underwriting revenues of $589 million.
Asset and Wealth Management Growth:
- Asset and Wealth Management revenues were $3.8 billion, with management and other fees up 11% year-over-year.
- Assets under supervision rose to a new record of $3.3 trillion, driven by $18 billion in alternative fundraising and long-term net inflows.
- Strong performance in alternatives, wealth management, and private banking and lending contributed to the growth.
Capital Management and Shareholder Returns:
- Capital management has been enhanced by regulatory changes, with a common equity Tier 1 ratio of 14.5% under the standardized approach, expected to decrease to 10.9% under the new regulatory framework.
- Goldman Sachs returned $4 billion to shareholders, including a 33% increase in the quarterly dividend to $4 per share.
- The company will continue to prioritize shareholder returns while investing in strategic growth initiatives.
Strong Financial Performance:
- reported net revenues of $14.6 billion for the second quarter of 2025, with earnings per share of $10.91 and a ROE of 12.8%.
- The growth was driven by strong performance in investment banking, financing, risk intermediation, and asset and wealth management.
Investment Banking Leadership:
- Global Banking and Markets revenues were $10.1 billion in the second quarter, with an ROE of nearly 18% for the first half of the year.
- The company remains #1 in league tables for M&A with a lead of roughly $85 billion in announced volume and $145 billion in completed volumes.
- The increase in advisory revenues reflects strength in the Americas and EMEA, with equity underwriting revenues of $428 million and debt underwriting revenues of $589 million.
Asset and Wealth Management Growth:
- Asset and Wealth Management revenues were $3.8 billion, with management and other fees up 11% year-over-year.
- Assets under supervision rose to a new record of $3.3 trillion, driven by $18 billion in alternative fundraising and long-term net inflows.
- Strong performance in alternatives, wealth management, and private banking and lending contributed to the growth.
Capital Management and Shareholder Returns:
- Capital management has been enhanced by regulatory changes, with a common equity Tier 1 ratio of 14.5% under the standardized approach, expected to decrease to 10.9% under the new regulatory framework.
- Goldman Sachs returned $4 billion to shareholders, including a 33% increase in the quarterly dividend to $4 per share.
- The company will continue to prioritize shareholder returns while investing in strategic growth initiatives.
Earnings Decrypt
Discover what executives don't want to reveal in conference calls
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