Goldman Sachs : Bank Europe SE – 2023 Half-yearly Financial Information (English)

GOLDMAN SACHS BANK EUROPE SE

Interim Management Report

Introduction

Goldman Sachs Bank Europe SE (GSBE or the bank) is engaged in a wide range of activities primarily in the E.U., including underwriting and market making in debt and equity securities and derivatives, asset and wealth management services, deposit-taking, lending (including securities lending), advisory services and transaction banking services. The bank is a primary dealer for government bonds issued by E.U. sovereigns. The bank serves a diversified client base that includes corporations, financial institutions, governments and individuals, from its registered office in Frankfurt am Main and branches in Amsterdam, Athens, Copenhagen, Dublin, London, Luxembourg, Madrid, Milan, Paris, Stockholm and Warsaw. The bank is registered with the commercial register number HRB 114190.

The bank is directly supervised by the European Central Bank (ECB) and additionally by the Federal Financial Supervisory Authority (BaFin) and the Deutsche Bundesbank in the context of the E.U. Single Supervisory Mechanism.

The bank is a wholly-owned subsidiary of Goldman Sachs Bank USA (GS Bank USA), a New York State-chartered bank and a member of the Federal Reserve System (FRB). The bank’s ultimate parent undertaking and controlling entity is The Goldman Sachs Group, Inc. (Group Inc.). Group Inc. is a bank holding company and a financial holding company regulated by the FRB. In relation to the bank, “GS Group affiliate” means Group Inc. or any of its subsidiaries. Group Inc., together with its consolidated subsidiaries, form “GS Group”. GS Group is a leading global financial institution that delivers a broad range of financial services to a large and diversified client base that includes corporations, financial institutions, governments and individuals.

The bank seeks to be the advisor of choice for its clients and a leading participant in financial markets. As part of GS Group, the bank also enters into transactions with affiliates in the normal course of business as part of its market-making activities and general operations.

The bank generates revenues from the following business activities: Investment Banking; Fixed Income, Currency and Commodities (FICC); Equities; and Investment Management, which includes Asset management and Wealth management.

The bank strives to maintain a work environment that fosters professionalism, excellence, diversity, cooperation among employees and high standards of business ethics. The bank recognises that it needs the most talented people to deliver outstanding results for clients. A diverse workforce in terms of gender, ethnicity, sexual orientation, background, culture and education ensures the development of better ideas, products and services. For further information about Goldman Sachs’ people, culture and commitment to diversity, see www.goldmansachs.com/our-commitments/diversity-and-inclusion/.

All references to June 2023 and June 2022 refer to the periods ended, or the dates, as the context requires, June 30, 2023 and June 30, 2022, respectively. All references to December 2022 refer to the date December 31, 2022. All references to “the 2022 Annual Report” are to the bank’s Annual Financial Statements and Management Report for the year ended December 31, 2022, which is available at www.goldmansachs.com/investor-relations/financials/. Any statements relating to future periods are subject to a high degree of uncertainty.

This half-yearly financial information, together with the interim management report, as of June 30, 2023 are neither subject to an auditor’s review nor have they been reviewed in accordance with Sec 317 of the German Commercial Code (HGB).

The bank uses certain key performance indicators (KPIs) to measure financial performance as well as to manage the development of its business and capital strength. The primary KPI’s for the development of the bank’s business are net revenues and net income. Net revenues is defined as the sum of interest income, interest expense, commission income, commission expense and net trading result. The primary KPI to manage the bank’s capital strength is the total capital ratio. The bank’s results presented in the interim management report have been prepared under the German Commercial Code (HGB).

Results of Operations

Net Revenues

Net revenues arise from transactions with both third parties and GS Group affiliates. The bank has revenue sharing agreements with GS Group affiliates related to certain activities under which it receives revenues from, and transfer revenues to, such affiliates. See “Results of Operations – Net Revenues” in Part I of the 2022 Annual Report for a description of each business activity.

The table below presents net revenues by business activity.

The bank has updated the definition of net revenues to exclude other operating income. The bank has also updated its methodology for allocation of funding costs and trading related special reserve, reported within net revenues, to its business activities. As a result, in the table above, comparatives have been conformed to the current period presentation, with a decrease in net revenues by €8 million.