Cautionary Note on Forward-Looking Statements Todays presentation - PowerPoint PPT Presentation

Cautionary Note on Forward-Looking Statements Today’s presentation may include forward-looking statements Today s presentation may include forward looking statements. These statements represent the Firm s These statements represent the Firm’s belief regarding future events that, by their nature, are uncertain and outside of the Firm’s control. The Firm’s actual results and financial condition may differ, possibly materially, from what is indicated in those forward looking statements. For a discussion of some of the risks and factors that could affect the Firm s forward-looking statements For a discussion of some of the risks and factors that could affect the Firm’s future results and financial condition, please see the description of “Risk Factors” in our current annual report on Form 10-K for our fiscal year ended December 2011. You should also read the information on the calculation of non-GAAP financial measures that is posted on the Investor Relations portion of our website: www.gs.com. The statements in the presentation are current only as of its date, February 12, 2013. +$3.2bn Credit Suisse Financial Services Conference 1

Goldman Sachs Presentation to Credit Suisse Financial Services Conference Harvey Schwartz Chief Financial Officer February 12, 2013

Firmwide Approach to Regulatory Change Guidelines Guidelines  Our clients drive our revenue opportunities Clients Drive  Clients dictate how they want to transact Strategy and Execution d E ti  Staying closely connected to client activity and responding quickly is critical  Constructive interaction with clients, regulators and other market participants Engage  History of adapting our organizational structure and mandates to meet client needs  Supported by culture of collaboration, client and results-driven focus and execution  No one has a crystal ball Predicting the  Investing too much, too early can be very expensive and counterproductive Future Future  Responding too late can also be costly Credit Suisse Financial Services Conference 3 1

Organizational Structure Firmwide Focus on Regulatory Preparedness  Clients 1 ― Asset Managers A t M Firmwide Regulatory Reform Executive ― Corporates Committee ― Hedge Funds ― Pension Funds  Regulators 1 Regional Implementation Working Groups Review Groups ― Federal Reserve ― SEC ― CFTC Recovery & Legal Entity Resolution Derivatives Structure ― FDIC Plans ― UK FSA ― European Commission Liquidity & ― Basel Volcker Capital Funding Funding ― IOSCO  Trade Associations 1 Granular Senior Engagement ― SIFMA/AFME Subcommittees ― ISDA 1. Includes selected clients, regulators and other trade associations Credit Suisse Financial Services Conference 4 2

Mortgages Crossroads Adapting to Changing Environment Basel 3 Capital Requirements Versus Basel 1 Basel 3 Capital Requirements Versus Basel 1 25% less 2 ~260% ~170% December 2 2011 December 2, 2011 June 7 2012 June 7, 2012 2.5 NPR Released 1 Final Market Risk Rule 1 Adjust Adjust Adjust Adjust Wait Wait Exit the Business Exit the Business 1. The percentage changes are relative to the capital requirements under Basel 1 for just the Mortgages Business Unit 2. Percentage decline represents the change in capital requirements between the Final Market Risk Rule and the 2.5 NPR Credit Suisse Financial Services Conference 5 3

Capital Efficiency Mortgages Franchise Efficiency Case Study December February June October 2011 2012 2012 2012 Basel 2.5 NPR Began Developing Basel 2.5 NPR Basel 2.5 NPR Achieved Improved Achieved Improved Finalized, Tools Finalized, Tools T Technology Related h l R l t d Released Capital Efficiency Provided to our to Requirements Traders  Working group  Working group  Leverage single  Leverage single  Provided tool that  Provided tool that  Made decisions  Made decisions evaluated tech platform coincided with to drive capital potential Sec DB the release of the efficiency outcomes final rule  Focus on CUSIP  Maintained level granularity  Took 6 months to conservative risk create profile in light of potential for increased capital requirements Credit Suisse Financial Services Conference 6 4

Capital Efficiency Tool Management Tools B  Both top down tool for senior A A Firm Total 10,000 20,000 5,000 35,000 management and a bottoms Securities Division Securities Division up tool for business heads Franchise Equities Franchise FICC Franchise  Variety of metrics can be B Interest Rate Products analyzed over time Currencies C C Commodities Commodities Global Credit  Allows you to look at capital Mortgages C usage across our businesses, products and regions g D  Provides detailed attribution D at business, desk and CUSIP Mortgage s Trading Mortgages Franchise level 2,500 CUSIP #1 9EQ24B5P1 2,500,000 9EQ2185V8 CUSIP #2 CUSIP #3 9EQ0XBG 48 CUSIP #4 9EQ451RC82 Data is shown for illustrative purposes only Credit Suisse Financial Services Conference 7 5

Capital Efficiency Tool Rule Explanation Tools Specific Risk Calculation Tool  The specific risk calculation tool provides our professionals with background on the drivers of our 9LN01HV 24 1.6% 12,000,000.00 capital requirements 1.0% 13,000,000.00 , , 9LN029637 9LN029637 90213G 207 8.0% 15,000,000.00  Users are able to get details including the type of 1.6% 17,500,000.00 9LN00LYM9 product, issuer details, seniority and selected ratings 0.25% 221597AF 4 0.25% 18,200,000.00 Data is shown for illustrative purposes only Credit Suisse Financial Services Conference 8 6

Capital Efficiency Tool Desktop Specific Tools OTC Capital by Clients Sensitivity Analysis B D Public Data TOT AL CLIENT 1 100 AA+ (22) (10) A 1,000 2.0% 20 120 8 0 1 CLIENT 2 CLIENT 3 CLIENT 4 CLIENT 5 CLIENT 6 CLIENT 7 CLIENT 8 CLIENT 9 CLIENT 10 E E C C Margin Period of Risk (weeks) Clients A D Calculated Capital including CVA VaR and Effective Estimated Impact of Change to MPOR E B Expected Positive Exposure Lowest Rating of S&P, Moody’s and Fitch C Data is shown for illustrative purposes only Credit Suisse Financial Services Conference 9 7

Evolution of Our Mortgages Business Amidst difficult market backdrop Amidst difficult market backdrop, …while earnings have been challenged relative to 2010, while earnings have been challenged relative to 2010 adjusted resource allocation… capital efficiency protects returns 2008 – 2012 2010 – 2012 1Q12 – 4Q12 Pre-Tax Basel 3 CSW 1 VaR Headcount Revenue Earnings Capital -14% -15% 15% -22% 22% -24% -38% -40% -76% 1. Credit Spread Widening stress test Credit Suisse Financial Services Conference 10 8

Key Areas of Focus  Information enhances decision making  Information enhances decision making  Technology must be deployed at a granular level Technology  Leverage the benefits of a single risk system, SecDB  Understand our clients’ needs  Determine how clients want to transact Client Needs  Understand impact on market structure  Core group focuses intensely on regulation and execution while broader firm focuses on client engagement focuses on client engagement Execution  Reacting quickly once we have clarity is critical  Requires significant collaboration Our culture and people will enable us to engage, adapt and execute in a changing competitive landscape Credit Suisse Financial Services Conference 11 9

Goldman Sachs Presentation to Credit Suisse Financial Services Conference Harvey Schwartz Chief Financial Officer February 12, 2013