The US earnings season kicks off again! Will performance exceed expectations?
高盛2025Q3業績直播
Key Takeaways (AI-Generated)
Financial Performance
- Net revenues of $15.2 billion, earnings per share of $12.25, ROE of 14.2% and ROTE of 15.2% for Q3
- Year-to-date ROE of 14.6% and ROTE of 15.6%
- Global Banking and Markets produced revenues of $10.1 billion with year-to-date ROE of 17%
- Advisory revenues of $1.4 billion, up 60% year-over-year
Business Highlights
- Achieved milestone of advising on over $1 trillion in announced M&A volumes for 2025 year-to-date
- Record alternatives fundraising of $33 billion in the quarter
- Launched 'One Goldman Sachs 3.0 propelled by AI' - new centralized operating model
- Announced acquisition of Industry Ventures, a leading venture capital platform
Financial Guidance
- Expecting to raise approximately $100 billion in alternatives fundraising for full year 2025
- Continue to expect growth in management fees and private banking lending revenues in high single digits
- Effective tax rate expected to be approximately 22% for full year
- Optimistic outlook for investment banking with expected strong M&A environment through 2026
Opportunities
- Sponsors have over $1 trillion of dry powder and $4 trillion of private equity assets
- AI-driven process reengineering through One Goldman Sachs 3.0 to drive automation and efficiency
- More supportive regulatory environment enabling strategic focus and resource redeployment
- Strategic partnerships and acquisitions to enhance distribution and product offerings
Risks
- Heightened vigilance required during periods of broad market excitement and record valuations
- Potential macro disruptions that could impact the constructive M&A environment
- Need for disciplined risk management in current market cycle, particularly in credit businesses
Full Transcript (AI-Generated)
Operator
Good morning. My name is Katie and I will be your conference facilitator. Today I would like to welcome everyone to the Goldman Sachs Third Quarter 2025 Earnings Conference Call on behalf of Goldman Sachs. They will begin the call with a following disclaimer. The earnings presentation can be found on the Investor Relations page of the Goldman Sachs website and contains information on forward-looking statements and non GAAP measures. This audio cast is copyrighted material of the Goldman Sachs Group. It may not be duplicated, reproduced or rebroadcast without consent. This call is being recorded today, October 14th, 2025. I will now turn the call over to Chairman and Chief Executive Officer, David Solomon and Chief Financial Officer, Dennis Coleman. Thank you, Mr. Solomon, you may begin your conference.
David Solomon
Thank you very much, operator, and good morning, everyone. Thank you all for joining us. We delivered very strong results in the third quarter and generated net revenues of 15.2 billion, earnings per share of $12.25, an Roe of 14.2% resulting in an Roe of 14.6% and an Roe of 15.6% for the year to date. This performance reflects the strength of our market leading franchises where we continue to harness the power of 1 Goldman Sachs to serve our clients with excellence in investment banking. We've seen increased momentum in our #1M and a franchise as clients turn to us for their most consequential transactions.
Recently, we hit the milestone of advising on over 1 trillion and announced M&A volumes for 2025. Year to date. This is $220 billion ahead of our next closest competitor and underscores our dominant position as the advisor of choice for clients. We've built this leadership position through decades of investment in our dedicated teams across the globe. This allows us to advise our clients on their most important transactions. We were the exclusive advisor to Electronic Arts in a $55 billion sale to a consortium comprised of the Public Investment Fund of Saudi Arabia, Silver Lake Infinity Partners.
We were also the lead advisor to Baker Hughes on its strategic acquisition of Chart Industries for $14 billion and advised and provided financing to Toma Grovo Elma Bravo for its $12 billion leveraged buyout of Dayforce. Importantly, given our One Goldman Sachs operating approach, increased M&A activity creates a real multiplier effect. Whether it's bridge financing, derivative hedging or investment opportunities for asset wealth management clients, our advisory relationships are often the genesis for client activities across the firm.
Looking forward, it's important to recognize the tailwinds behind our optimistic outlook for investment banking. We're encouraged by the steady build and sponsor activity, which is now tracking 40% higher versus last year. And considering that sponsors have over 1 trillion of dry powder and 4 trillion of private equity assets in their portfolios, coupled with the expected rate cuts in the US, the setup remains constructive for corporates. It's clear from our conversations and board groups that after a period of heightened uncertainty and volatility early in the year, many of our clients have navigated and adapted to the current state of play.
Though near term policy considerations are still relevant, many CEOs have shifted their focus back to long term and strategic decision making, particularly amid more supportive regulatory environment. Scale and investing for growth remain paramount, especially in the context of harnessing AI capabilities. In addition to a robust investment banking backdrop, we've seen continued strength across our leading FIC and equities businesses, which in total rose on a year over year basis for the 7th consecutive quarter. Much of the momentum from the first half of the year persisted through the summer and into September, contributing to our record year to date performance for equities and notable strength in our rates business.
Within FIC, all in our markets, businesses continue to demonstrate resilience that comes from having a global broad and deep franchise. Taking a step back, there is no question that there's a fair amount with U.S. equity markets consistently hitting record highs over the last several months. Much of this has been fueled by a tremendous amount of investment in AI infrastructure, which has driven significant capital formation. But as students of history, we know the following periods of broad based excitement around new technologies. There will ultimately be a divergent where some ventures thrive and others falter.
While I feel good about the forward outlook, on balance, the market operates in cycles and disciplined risk management is imperative. We are especially vigilant in times like these to proactively manage risks as we continue to serve clients with our best in class execution capabilities and insights. In asset and wealth management, we are relentlessly driving forward our growth strategy. Assets under supervision rose to a record 3.5 trillion. We again delivered record results across our more durable revenues and management and other fees in private banking and lending.
In alternatives, we raised a record 33 billion in the quarter. As a result, we now expect to raise approximately 100 billion in alternatives this year, substantially exceeding our prior full year fundraising expectations. In wealth, client assets rose to a record 1.8 trillion. As we continue to grow our advisor footprint and expand our suite of client offerings, it is clear that we've been making very strong progress in enhancing our business mix by growing our more durable revenues than AWM. We are also accelerating our growth via innovative partnerships and acquisitions.
Yesterday, we announced the acquisition of Industry Venture, a leading venture capital platform with a track record of strong investment performance and the proven ability to invest across all stages of the VC life cycle. This transaction complements our market leading secondary investing franchise. We have been a pioneer for over 25 years and has a highly attractive technology investment capability to the platform. This business will fit in our external investing group or XIG, which has over 450 billion in assets under supervision across asset classes. It is a market leader in investing in alternative manager strategies, secondaries, Co investments in GP stakes importantly facilitated by A1 Goldman Sachs approach industry ventures.
Deep relationships across the VC eco system have the potential to drive new opportunities for the firm, particularly in investment banking and wealth management. Additionally, last month, we announced the strategic collaboration with T Rowe Price to deliver a range of public and private market solutions designed for the unique needs of retirement and wealth investors. We are thrilled to partner with T Rowe, which like Goldman Sachs has a strong brand with a long track record of success across investing in capital markets and in producing strong investment returns for clients.
With our 30 years of experience in private markets and an ability to blend asset classes to address outcome oriented objectives, we can help bridge the gap between growth opportunities in private markets and the needs of individual investors. As we drive growth across our businesses, operating efficiency remains one of our key strategic objectives. Although we review our operations on an ongoing basis, it is also important to make long term decisions that best position the firm for the future, especially as rapidly accelerating advancements in technology present significant opportunities.
To this end, earlier this morning we announced to our people the launch of 1 Goldman Sachs 3.0 propelled by AI. This is the new more centralized operating model that we expect to drive efficiencies and create capacity for future growth. This is a multi year effort that we will build over time and we plan to measure our progress across six goals, enhancing client experience, improving profitability, driving productivity and efficiency, strengthening resilience and capacity to scale, enriching the employee experience and bolstering risk management.
To start, we are drilling in on a handful of front to back work streams that can significantly benefit from AI driven process reengineering and will help inform our longer term approach. These include priorities such as sales enablement and client or onboarding that directly impact the client experience as well as other critical areas that have touch points across the firm. For example, our lending processes, regulatory reporting and vendor management. We've been successful by not just adapting to change, but anticipating it and evolving the firm's operating model is part of the long term discipline that our people, clients and shareholders expect of Goldman Sachs.
We will provide you with an update with additional details on our call in January. While we've made significant progress on our strategic priorities, we will continue to execute the foundation we've laid to grow and strengthen the firm. Coupled with our market leading franchises and best in class talent give me confidence in our ability to deliver for clients and drive strong performance for shareholders. I will now turn it over to Dennis to cover our financial results for the quarter.
Dennis Coleman
Thank you, David. Good morning. Let's start with our results on page one of the presentation. In the third quarter, we generated net revenues of $15.2 billion, earnings per share of $12.25, an Roe of 14.2% and an ROTE of 15.2%. Let's turn to performance by segment, starting on Page 3. Global Banking and Markets produce revenues of $10.1 billion in the quarter, with an Roe for the year to date of 17%. Turn to Page 4. Advisory revenues of $1.4 billion were very strong, up 60% versus a year ago, reflecting a significant increase in completions in the quarter.
Year to date, we remain number one in the league tables for announced and completed M&A, not only globally, but in each of the Americas, EMEA and APAC. Equity underwriting revenues of 465,000,000 are up 21% year over year on significant pickup in IPO activity as we price some of the most highly anticipated IP OS including Klarna, Figma and Figure Technologies. More broadly, we're pleased to see the broad based recovery in the IPO market pickup steam. That underwriting revenues of 788 million rose 30%, primarily reflecting higher leverage finance activity.
While acquisition related activity is picking up amid more deal announcements, there is more room to run which plays to our strengths as a firm. Year to date, we ranked second in high yield debt underwriting and leveraged lending cross investment banking. We continue to see strong momentum with our quarter end backlog at its highest level in three years despite very strong accruals. Tech net revenues were 3 1/2 billion dollars in the quarter, up 17% year over year. Intermediation results were driven by improved performance in rates, mortgages and commodities, partially offset by lower results in currencies and credit products.
Financing revenues of $1 billion were driven by strong results in mortgages and structured lending. Equities net revenues were 3.7 billion in the quarter. Equities intermediation revenues of $2 billion fell 9% year over year, driven by lower revenues and cash products, partially offset by better performance and derivatives. Record equities financing revenues of $1.7 billion were 33% higher year over year amid record average prime balances. For the quarter, total financing revenues at $2.8 billion rose 23% versus the prior year as we continue to deploy resources to grow fixed financing and bolster our leading position in equities financing while maintaining a keen eye on risk management.
These revenues comprise nearly 40% of overall thick and equity revenues. Let's turn to Page 5. Asset and wealth management revenues in the quarter were $4.4 billion. Management and other fees were up 12% year over year to a record $2.9 billion on higher average assets under supervision. Private banking and lending revenues were $1.1 billion excluding the payment of interest on a previously impaired loan. Year to date, revenues were up in the high single digits year over year, driven by higher net interest income from lending to our ultra high net worth clients.
In aggregate, our revenues across management and other fees and private banking and lending total a record $4 billion in the quarter and $11 billion for the year to date. We continue to expect growth in the high single digits on an annual basis over the medium term. In the AWM segment, we generated a 23% pre tax margin and a 10 1/2% Roe for the year to date. Excluding the impact of HPI and its $3.6 billion of average attributed equity, our pre tax margin in Roe would have been approximately 150 and 250 basis points higher respectively.
Now moving to page 6. Total assets under supervision ended the quarter at a record 3 1/2 trillion dollars, up sequentially on 80 billion of net market appreciation as well as $56 billion of long term net inflows across asset classes, representing our 31st consecutive quarter of long term fee based net inflows. Turning to page 7 on alternatives, Alternative assets under supervision totaled $374 billion at the end of the third quarter, driving 597,000,000 in management and other fees. Gross third party alternatives fundraising was a record 33 billion in the quarter driven by demand across strategies including private equity and credit, bringing year to date fundraising to $70 billion on page 9.
Firm wide net interest income was 3.9 billion in the third quarter. Our total loan portfolio 1/4 end was 222 billion, up modestly versus the second quarter. Our provision for credit losses of 339,000,000 primarily reflected net charge offs in our credit card portfolio. Turning to expenses on Page 10, total quarterly operating expenses were 9 1/2 billion dollars. Our year to date compensation ratio net of provisions is 32 1/2 percent. And represents our best estimate for the full year inclusive of higher severance costs, 100 basis point improvement year over year reflects stronger revenue performance.
Quarterly non compensation expenses of 4.8 billion rose 14% year over year driven by higher transaction based costs as well as charitable giving and higher litigation expenses. Our effective tax rate for the year to date was 21.5%. For the full year, we continue to expect the tax rate of approximately 22%. Next capital on slide 11 in the quarter we. We returned 3.3 billion to shareholders, including common stock dividends of $1.3 billion and common stock repurchases of $2 billion. Our common equity tier one ratio was 14.4% at the end of the third quarter.
Under the standardized approach in the current regulatory framework, our C21 requirement is 10.9%, so the NPR and CCAR averaging is still outstanding. In conclusion, given the continued execution on our strategic objectives, our market positioning and the improving operating environment, we are confident in the outlook for our businesses. We are the number one M&A advisor globally, well positioned to capitalize on the upswing and investment banking activity, which we expect the next 12 to 24 months. We're delivering on our growth strategy to drive more durable revenues across AWM.
We're focused on efficiency and leveraging AI to meaningfully transform the firm. And this is all in the context of the improving regulatory backdrop, which should allow us to be on offense as we deploy resources and service of our clients all together. We remain confident in our ability to continue to deliver for shareholders, but that will now open up the line for questions.
Operator
Thank you, ladies and gentlemen. We will now take a moment to compile the Q&A roster. If you would like to ask a question during this time, simply press * then the number one on your telephone keypad. If you would like to withdraw your question, please press * then two on your telephone keypad. If you're asking a question and you are on a hands free unit or a speakerphone, we would like to ask that you use your handset. When asking your question, please limit yourself to one question and one follow up question. We'll take our first question from Glenn Shore with Evercore.
Glenn Shore
Hi, I wanted to follow up on your question about remaining especially vigilant, vigilant and actively management at times like these. I did notice some more news stories lately that you and others in the industry have been more active on the SRT front and synthetic risk transfer. I wonder if we could talk about how you're executing that especially vigilant on managing risk and what loans are moving off potentially off balance sheet? On these risk transfers, just curious what's driving that? Other than just we're 17 years into a good cycle and it's and it's and valuations are high and things like that. So thanks.
Dennis Coleman
Sure, Glenn, thanks. Thanks for the question. Look, this there have been a number of articles on on those transfers including naming us. I would say that our practice is is pretty unchanged and that we are constantly looking to dynamically risk manage our portfolio of credit exposures. We have a variety of different tools that we use to to risk manage and hedge that risk. SRT is one of those tools that's available to us. We're basically trying to ensure that the firm's, you know, in a position to continue to be able to support ongoing levels of client activity and you know, prudently risk managing the existing portfolio as we think gives us the capacity to do that.
So no, no, no flashing warning signs. It's just prudent risk management. It just so happens to be year end. So you know, Fed, cutting balance sheets, things like that. Just keep keeping clean, good hygiene. This is an ordinary course. This is ordinary course risk management for us.
Glenn Shore
OK, cool. The other clarifier I wanted to get was the the messaging behind the the one GS 3 point O meaning normally you see some companies go through strong iterations of that when they're having some revenue issues. You're not having any revenue issues. You talk to you've been putting up great numbers and you and you talked about a great banking pipeline in the next 12 to 24 months. Is technology enabling this heightened awareness on efficiency and some of your AI investments. I'm just curious a little bit more about the the why behind the one GS 3 point out we like it. Just curious.
David Solomon
Yeah, thanks Glenn. I appreciate the question. And you know you, you've got it right. You know, I think we're at a place where the tech, the evolution of the technology is allowing enterprises broadly. I find this as I'm talking to CEO's, you know, all over the world, all businesses are focused on this because the technology actually allows you to take a fresh look front to back at certain operating processes and really reimagine. And so this has nothing to obviously the firm's performing, the firm's growing. We feel very good about the execution, but we see this as an opportunity to use technology to automate, drive scale, create efficiency and actually give us the capacity to invest more in the growth of our business.
And so our responsibility to shareholders is to grow earnings and is to run the firm, you know, the best that we can. That doesn't matter whether it's good times or bad. And you know, in order to execute on something like this, it's scaling the organization. We have to bring the organization along too. And so part of the purpose, we've been working on this for a while, we've been talking about it as a leadership team. Part of the purpose of putting this out is it now allows us to talk more broadly and create a framework for the organization to understand the process that we're going to go through.
And I think there's an enormous upside, you know, for our business here to allow further investment and growth. And by the way, I think you're going to hear this from lots of companies and lots of industries that people are very focused on taking advantage of this acceleration in technology to really allow automation, efficiency and therefore investment. And by the way, this is one of the reasons why we're optimistic about the forward, the productivity gains and the economy from enterprises finding ways to do this, you know, really I think are going to be very meaningful over the next few years. And that creates a good tailwind that will balance, you know, other macro factors that may or may not come into play.
Glenn Shore
Thank you.
Operator
We'll take our next question from Ibrahim Poonawala with Bank of America.
Ibrahim Poonawala
OK, good morning. I guess if you want to go back to there's been obviously a lot of headlines and some rights, some misplaced around risks on the private credit side. I think David you have a Goldman has an interesting perspective given how long you've been in this space and you've seen the evolution of the space, address it in in two ways, if you could please. One, when you think about the leverage that banks and Goldman provides to some of these players, how should shareholders think about the risk that on at the back end you could suffer losses because of the lending to NDFIS? And secondly, does any of this cause you to kind of recalibrate how you're thinking about growing in the OR the private credit business? Thank you.
David Solomon
Yeah, I mean, I'll, I'll, I'll start. Dennis can add, you know, some more granular detail, maybe comment, you know, just on some of the things that have been in the press. Recently, but you know, first of all, you know, we, we, you know, we're, we're, we're in business to serve our clients, finance our clients. But all of this is underpinned by the fact that we have a very strong risk management culture and strong underwriting is really central to everything that we do. So you know, it's important to take a step back and you asked about NDF is it's a very broad category. There are all sorts of different activities.
You know, we have a very, very diversified book of lending exposure. The vast majority of our lending is collateralized financing and investment grade rated structures. For the vast majority of it is investment grade rated. But you know, look, we're constantly risk managing. We're constantly trying to create more capacity to do other things to support our clients. And we think about it as a broad, big diversified portfolio. Obviously, if you got into a period where we had a credit cycle, which we have not had in quite some time, you know, there'd be headwinds, you know, for all the banks.
But I think we feel very, very good about our processes, our collateral, the structure of the book. And a little bit back to the question that Glenn Shore started with, we have a whole series of risk management processes that we constantly execute on to try to make sure we're being prudent at times like this. Dennis, you want to comment a little on some of the specific things that have been in the press. And sure, you don't add anything to what I said.
Dennis Coleman
The only thing is to add, you know, we obviously don't have any direct exposure to either of the big names that have been the press lately. And, and picking up at David's point, we've been in the the business for a very long period of time. We've been lending through multiple cycles and you know analyzing downside risk and doing you know, consistent high quality credit underwriting is key. The names in our portfolio are you know underwritten on a on a bespoke basis and we maintain very stringent standards with respect to our our aggregate exposures, our diversification, our concentration risks, the attachment points, collateral packages, the risk return characteristics, duration, etcetera.
So, Russ, we're, we're maintaining our, our standards. We've set on multiple previous calls that we've had good opportunities to grow the fixed financing line. But we have said multiple times that the demand from our clients far outstrips the growth that we have maintained a level of selectivity with respect to credit selection, risk return profiles. And that's still that's still the case. Credit, credit selection, being disciplined about that on the, you know, going in is ultimately what protects you when inevitably certain things will go wrong.
Ibrahim Poonawala
That's helpful. And I guess just one more, when we think about regulatory changes, we had the Treasury Secretary talk about this in a speech last week. Just give us a mark to market around your expectations as we think about the G sub surcharge and Basel end game. How are you thinking about the timeline and capital planning around all of that? And I think the bigger question that's come up with investors is, is the competitive positioning of Goldman getting better, but you're not being buried with incrementally new regulations. And so when we think about Goldman competing with the non banks across varied businesses, is that also just at the margin getting better, if you can comment on that? Thank you.
David Solomon
Sure. I mean on the second point, I absolutely think that the regulatory direction of travel is improving our competitive position significantly on the timeline. You know, it's harder to give me an to give you an exact timeline, but I'd say you're going to see real progress this fall and real progress during the first half of 2026. I would expect to have a very, very, very clear picture of a bunch of the regulatory issues that we're all focused on collectively over the course of the fall in the first half of 26, you know, into the end of the CCAR cycle. You know, next, next summer, I think we're certainly going to see SLR relief.
I think we're certainly going to see more transparency around CCAR and a continued recalibration because of that. I think we're going to see a recalibration of GSIB. I think going to see a much more constructive Basel 3 end game. And obviously, the regulatory tone and the focus of resources that we have to direct toward regulatory is, is shifting in a way that we can redeploy those other things that create avenues of growth. So I would say quite constructive, these things take time, but it's happening real time. And I do, you know, going back to where I started, I do think this improves, you know, our competitive position, you know, relative to others that are outside of the regulatory landscape.
Operator
We'll take our next question from Erika Najarian with UBS.
Erika Najarian
Thank you. Given the comments about the regulatory landscape and focusing on growth and the opportunity to play off. Sense and clearly you announced the collaboration with T Rowe and you know, industry ventures. I'm just wondering, David, if you think about, you know, Goldman Sachs in the future, you know, 1 Goldman Sachs 3 point O, you know, what are those opportunities for growth that you think maybe are missing or not scaled in the business right now that will really sort of maybe stabilize or enhance that sort of 15% ROA as we look forward, even without such a robust capital markets backdrop?
David Solomon
Sure. So you know, I think, you know, I think we've, we've, and I appreciate the question. I think we've talked about this a lot, Erica. But you know, at the end of the day, you know, our strategy remains the same. We continue to invest in global banking markets and are very, very focused on share and wallet share. We believe through the cycle that is a mid teens business. That doesn't mean there couldn't be a year or environment where where that business is different in a different in a different capital markets environment. But we believe consistently through the cycle we now have that business operating as a mid teens return business.
And we've been clear that asset and wealth management remains a very, very attractive growth channel for the firm. And you can see us improving margins and uplifting returns there. But there's still more to go. And we are highly confident in our ability to uplift the returns and asset wealth management over the next couple of years. That obviously strengthens and enhances the overall return profile and durability of the firm. We are executing against that. And I think you can see through T Rowe and also through our acquisition of Industry Ventures that we, this gives you an idea of how we're thinking about strategically accelerating that growth and strengthening that overall platform.
We're going to do it thoughtfully. We're going to do it carefully. We're going to do it prudently, but we're going to make investments that we think strengthen the platform and allow us to continue on that trajectory. So when you think about the firm, two big businesses, banking and markets, asset and wealth management, banking and markets, mid teens through the cycle and as we execute on asset and wealth management and continue to enhance the returns, that should produce a significantly higher return than it currently produces. And we're confident on our ability to deliver that. That therefore gives you a more durable targeted return.
Erika Najarian
Thank you, David.
Operator
Thank you. We'll take our next question from Christian Belou with Autonomous Research.
Christian Belou
Good morning, David and Dennis. Just firstly on the equities business, I appreciate that we can't read too much into one quarter, but curious what drove or what you think drove the underperformance versus peers? Also, we'd love to get some more color around, I guess, the decline in equity intimidation revenues. I believe you called out cash equity as a driver.
Dennis Coleman
Sure, Christian. So as you say in the beginning of your question, you know, the overall strength of our equities platform remains, you know, an excellent. Addition, we're having our best year to date performance ever for that business. The cash component of equities intermediation was softer in the prior year. That that activity was up almost 30% and the prior quarter was a top decile quarter. So our comps were were difficult and we had you know slightly less robust performance in the cash portion of the business, but the rest of the franchise continues to form extremely well across the derivative components of intermediation.
The financing piece was a record and in aggregate, again, the franchise feels, you know, extremely well positioned. We're seeing high levels of client engagement and feel good about how it's set up for the forward.
Christian Belou
OK, thank you. And then this was a bit of a wonky question, so please bear with me. But just given all the jitters around, you know, things like First Brands and Tricolor, which apparently had, I guess some flood issues around collateral being been pledged multiple times. Can you talk about or at least remind us how you manage risk in your financing businesses, especially around collateral integrity?
Dennis Coleman
Sure, Kristen. And, and, and this will this will sound familiar to some of my some my previous remarks. But the the process for us is and the importance for us is to make sure we have a consistent set of underwriting standards and that we have robust upfront due diligence, that we have ongoing monitoring and reporting. We diligence underlying collateral that we manage the the granularity of our portfolio within our own internally set diversification and concentration limits and that we have, you know, have consistent standards for what we expect to turn characteristics to be, you know, some of those idiosyncratic names that you that you give reference to.
We didn't have direct exposure to those names. You know, part of the the key to credit underwriting is to make sure that you miss some of the some of the more challenged credits and that that all comes down to upfront diligence and having a long standing track record and an ability to be selective. We have a very big market presence here. We see a lot of opportunities. There's a lot of demand from clients for us to support them and we have the ability to be selective with respect to where we extend our balance sheet, make sure it comports with our own standards of risk management.
Operator
We'll take our next question from Betsy Graseck with Morgan Stanley.
Betsy Graseck
Good morning. Hello. Can you hear me? Hi, OK, great. David, you mentioned earlier about OK, great. Thank you. David, you mentioned earlier about how prudent careful strategy execution as we were discussing the as you were discussing the partnerships and acquisition that you announced the other day. It would be interesting to understand what you think the opportunity set is for you in the space in wealth and asset management from an acquisition perspective in the sense of is should we expect these, you know, kind of bite sized overtime building up over time or are there opportunities that you see that could potentially get you to a larger scale faster?
David Solomon
Yeah, I mean, first of all, Betsy and I appreciate the question and and some of this will sound familiar to things I've said on other earnings calls. I say publicly, you know, in my public comments, we're obviously focused on accelerating the asset wealth management business. Our wealth management business is an ultra high net worth franchise and I would say it is scaled and we don't, you know, unlike other you know peers, we are not looking, you know, to directly control client, client relationships in the broad. High net worth space or in other broad wealth channels, that's not really our strategy.
Our strategy is to continue to grow and be the leading ultra high net worth, high touch wealth platform and got it married with our extraordinary, you know, manufacturing capability and product offering in our asset management, in our asset management business. And the acquisition that you saw today of industry ventures, you know, adds to that, it's giving our very, very wealthy clients access to other investment opportunities and products that are, you know, hard to access in different channels. And so, you know, we feel very good that that's very, you know, on strategy.
Are there larger acquisitions that could enhance, you know, our wealth platform? Absolutely. But things I've said before, the bar to do more significant things is always going to be very high. And I've also said when you look at the best companies and the best businesses around, asset and wealth management, they're generally sold, not bought, and most of the best ones are not for sale. And not, you know, not available, but if we saw something that could accelerate our journey and asset wealth management, we'd certainly consider it. But always with a very, very high bar.
At the moment, what we're seeing is interesting things that enhance our distribution and enhance our ability to offer very, very unique, you know, products to our client base already. And we'll continue to, you know, capture through third party wealth channels, you know, opportunities to use our manufacturing capability and asset management more broadly.
Betsy Graseck
OK, thank you. And then just separately, is there, should we still be anticipating an exit from the Apple Card at some point in the near or medium term or is that no longer expected? Thank you.
David Solomon
You know, so we've been, we've been clear that credit cards are not a go forward focus for for Goldman Sachs. I don't have anything more to say on the Apple Card program at the moment. You saw us completely and we now are completely exited from the GM card platform when there's something more for for me to report on the Apple Card. You know, I guarantee that this broad group that's on the call will be among the first to know it.
Operator
Thank you. We'll take our next question from Mike Mayo with Wells Fargo Securities.
Mike Mayo
Hi, in what role is on the negative side Goldman Sachs 3.0? I would think platform solutions might not make the cut and I guess that relates to the Apple Card. And I guess I'm just wondering why you're the leading deal maker in the world and that's still hanging around. I guess that's a follow up. But on the positive side, you said the quarter end backlog is at the highest level in three years. Can give us a sense of that mix? And also if I heard you correctly, you said I might have heard this incorrectly, 40% of your pick and equity trading is financing. If I got that wrong, if you could correct me and what's comprising that? Thank you.
Dennis Coleman
Sure. So you you heard correctly our backlog to the highest level in three years. You know that that backlog that we report comprises the advisory equity underwriting and debt underwriting components in aggregate. We made a point that it's, it's actually stands at that position notwithstanding very high levels of rules over the course of of the of the previous quarter. And it it gives you a sense for our optimism on the outlook and our expectations for other types of activity that are to come through come through our franchise. Broadly.
You're also correct in your, your understanding of the contribution of Fick financing and equities financing as a combined component of the Fick and equity lines combined. So we continue to focus on growing those those durable and predictable financing revenue streams that are just reporting out on the sort of marginal contribution that they represent within the overall Fick and equities business.
Mike Mayo
And as far as the that 40%, that's up I think from 33% quarter over quarter. And I'm just wondering what were the sources of that incremental growth.
Dennis Coleman
This has been an activity that we have been steadily, steadily growing over the last last couple of years. As we as we think about the durable revenue profile of the firm, those components of of global banking and markets together with you know management and other fees, private banking, lending and asset wealth management. Those are the areas the firm that we've been consistently deploying resources against and been focused on that has been steadily growing. So I don't think that's I don't think there's a new step function change in that contribution. It's been a constant commitment. It's been steadily growing the last couple of years.
Operator
We'll take our next question from Brennan Hawken with Banks Of Montreal.
Brennan Hawken
Good morning. Thanks for taking my question. I was curious about an AWM. So if we just for the impact of HPI pre tax margins are you know sort of roughly at the mid 20s and the roughly mid 20s target, excuse me on a core basis. So if we think about what's going to drive due to that mid teens Roe, is it is it more around the capital side or do you still have continued room on the profitability front that that Roe high?
David Solomon
I think, I think Brennan, a high level, you know, just to boil this down, we've been pretty consistent on this. We continue to fundraise and we continue to grow the scale of the. Platform as that fundraising goes on C that adds to the management fee and you know the marginal margin as you scale the business continues to improve significantly. So we are very confident as we continue to fundraise and scale the platform that there's more room on the margin side as we continue to shift our strategy and you know, finish on the finish with the HPI portfolio. You know that will free up a little bit of capital. But at this point, most of the margin and return improvement is coming from the continued growth and scaling of the platform.
Brennan Hawken
Perfect. Thanks for that color, David. And on the expense side, you were clear in your expectations on the comp ratio, but curious about non comp. We saw a charitable contribution this quarter, which is normally I believe in the fourth quarter instead. So was that just a timing change or is there going to be contributions in just the back half going forward like third and fourth quarter? And what's the right way to think about a jumping off point for non comp?
Dennis Coleman
So appreciate the comment on on non comp. We, we continue to have all the same, you know, programming and discipline around managing overall non comp growth. The biggest, the biggest driver for us again was transaction based expenses. That's obviously correlated with the elevated levels of activity we're seeing across the board. We did call out the, the charitable expenses. You are correct in your recollection that traditionally we did recognize most of those expenses in the fourth quarter. This year we're making an effort to actually spread it out over the course of the year. So it won't be showing up only in the in the third quarter.
Operator
Thank you. We'll take our next question from Dan Fannon with Jefferies.
Dan Fannon
Thanks. Good morning. You've exceeded or met most of the, if not all of your targets in asset and wealth management, except the kind of billion dollars of incentive fees you're tracking below that this year. Just curious as to when you think your, your ability to hit that is
Dennis Coleman
so our fairpoint, Dan and, and that and, and your question actually also helps, you know, answer the question on how asset and wealth management sort of migrates towards a higher return profile over time because it's another one of the contributors to top line. It also has, you know significant marginal margin contribution and you're right to ask because the the unrealized balance of incentive fees as of the last quarter is now at $4.6 billion. So we still do have the visibility and expectations that there's significant amounts of incentive fees that will pull through the PNL, you know, over the next several years.
Ultimately it's going to be a function of the way in which certain of those vehicles are able to, you know, finally monetize their investments and and return carry to their investors and enable us to recognize the incentives. But overall environment, deal making environment, monetization environment, proportion of sponsor activity in the world, all of that is trending in the right direction and that should help propel us closer to our medium term targets of a billion of incentive fees per year.
Dan Fannon
Great, that's helpful. And then just wanted to follow up on the old business. Given the strength and fundraising you raised the guidance after several years of strong growth, can you talk about the funds that are coming in either bigger or the more funds coming to market, anything specific you could point to this, you know driving some of that excess growth?
Dennis Coleman
So you know, obviously last five years we've been raising about 65 billion a year, which was a healthy was a healthy clip. Our expectations now for this year, our step function higher, you know approximately 100 billion, but the the contribution is broad based. So it's across multiple different asset types and it is a it's a combination of having certain vehicles that are larger than previous vintages as well as launching, you know new types of fundraising vehicles. So it's pretty broad based contribution across the board.
Operator
We'll take our next question from Devin Ryan with Citizens.
Devin Ryan
Great. Good morning, David. Dennis, first question just on the financial advisory strength, obviously really nice on an absolute basis. And then relative to peers as well and all the data we look at would suggest we're still pretty early in the recovery for that business. Sponsors are just starting to reengage and and then I know you talked on touch on the market share gains as well. Just be good to get some additional context on where you feel like we are in the broader recovery for the advisory business for the industry right now. You know how far away we are from the baseline. And then just from a market share perspective, is that senior bank or headcount up a lot or? Is that just one Goldman Sachs resonating?
David Solomon
So a couple of aspects to it, Devin, appreciate the question. First on the cycle, you know, we've been talking about an improvement, you know, in M&A all year, because one of the things we see inside the firm is we've got really great transparency inside the firm as to all the transactions that are in progress and, and kind of what CEO's are doing and thinking that in my remarks, my prepared remarks, if you remember, I said, you know, after a little bit of volatility early in the year, CEOs are really focused on strategically where they want to go.
You know, I think, you know, I think one of the things to frame is that we're in an environment at the moment where CEOs think that, you know, the opportunity to get things done strategically is now possible after being in a period of time where they felt it was not possible. And so that's turning them all to focusing strategically. We have significant activity in the shop. You saw the comments around our backlog, you know, that kind of shows you the sustainability. You know, I, I, I think that we're going to see a very constructive M&A environment through the end of the year into 2026.
I'd expect 2026 to be a stronger M&A environment unless there's some macro disruption. So I think the you know, there's been a meaningful improvement in where we are in the cycle. But I still think given market cap expansion growth, the fact that we were under penetrated in terms of activity because the regulatory environment for the last four years, you know, I expect you know a pretty healthy environment. We commented on sponsors, the sponsor activity is up kind of 40%. We see more of that in the pipeline. And so I think you're going to see an acceleration there. So I think it's quite constructive, quite constructive.
Devin Ryan
That's great. OK. Just want to come back to the prime services and financing as well. I know it's been steady growth as Dennis mentioned, but I suspect there's also a bit of a cyclical component there just tied to higher risk appetites. And then there's the obviously the secular and kind of Goldman Sachs market share story. So just with where we are with your record valuations across a number of assets, is there a way to frame how you're thinking about the cyclical demand in that business right now significantly elevated? And then just from a secular growth story, just talk about how much more room there is over the next handful of years here? Thanks.
Dennis Coleman
Sure. So you're, you're right, this business definitely benefits from, from the underlying environment. Balances are are very, very correlated with overall levels in the markets. That is a, you know, attractive feature of the business. But there's obviously the composition of the portfolio and the nature of the activities and the flows that go into it. So you can, you can, you can calibrate, you know, more or less growth relative to the underlying backdrop based on how you manage your portfolio of credit extension.
It has been together with fixed financing a good source of stable revenues for us across the franchise. It's a product that is highly valued by our clients. There's a lot of demand for us to provide more by way of prime brokerage services to our clients. And so it's it's something that we're very strategically focused on continuing to provide to meet with, you know, clients demand.
Operator
Thank you. We'll take our next question from Gerard Cassidy with RBC.
Gerard Cassidy
Good morning, Dennis. Good morning, David on the comments you made David on Goldman Sachs 3.0, which obviously is very positive as outsiders, how do you direct or where should you direct us, how we measure that success over the next three to five years as you rule this out throughout the organization? Is it going to be primarily through the ROTCE number or is there something else we should focus on?
David Solomon
So Gerard, I appreciate the question. You know, when in my prepared remarks, when I laid it out, I said to you that, you know, in the first quarter, we'll give you a further update on this. You know, if you, if you go back and you think about the way we've operated in the past, we, we, we give you information. We then hold ourselves accountable for that. Part of the reason that we made this announcement today is to do these kinds of things in their organization, like Goldman Sachs. We have to bring the organization along and we have to create, you know, a road map for the organization.
When we're in a position that we can give you more concrete metrics that you can track and we can quantify and proportionalize. We have good ideas on those things now, really good ideas. Those things. We're not prepared to lay that all out specifically for you. But I promise you that as we go into the first quarter and the second quarter, you know you'll have more transparency on what we're doing, the opportunity, how to think about it and how it drives further earnings growth to the firm.
Gerard Cassidy
Very good. Thank you. And then as a follow up, obviously you guys are very well capitalized with the CET one ratio just over 14%, the requirement 10.9%. You've been very active in returning that excess capital through share repurchases. As we go forward, assuming the regulatory environment continues to move in the direction that you've referenced, David, where should we see the buffer? I mean if you come in with a final number maybe in a year or two, something closer to 10 1/2% men regulate, you know the regulatory requirement. What kind of buffer do you guys like to operate above your regulatory requirement when it comes to CET one?
David Solomon
So I think the way to think about a buffer is, you know, it depends on the clarity you have in the capital regime. I think that there is a reasonable chance or a good chance that after operating a period of time where there was a lot of capital volatility and firms had a hard time planning their capital on a year to year basis, there's a good chance we're going to be in a regime where we have more clarity on our capital for a multi year period of time, certainly within a tighter range that would lead to narrower buffers than what we and others on the street have been running with over the course.
You know of the last five years when there's been more capital volatility. If you go back and you look over the last few years, most of the institutions have been running larger buffers because there was more capital volatility through the CCAR process. You have more transparency around that process. And also because you put in something like averaging, that means that there's going to be less volatility on a year to year basis. I think most firms, including ourselves, would be comfortable running with buffers that are less than the buffers you've seen, you know, on average over the last few years.
But as we have more clarity in that, as I said earlier, I think the direction of travel is quite positive. We'll give you more of a sense of how we think about the buffers, but that's a big macro way to think about it. And this is another thing that's actually quite constructive for Goldman Sachs and for others in the industry.
Gerard Cassidy
Thank you.
Operator
At this time, there are no further questions. Ladies and gentlemen, this concludes the Goldman Sachs third quarter 2025 earnings conference call. Thank you for your participation. You may now disconnect.
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