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Fitch: Goldman Posts Solid Operating Performance

  Fitch: Goldman Posts Solid Operating Performance

Business Wire

NEW YORK -- April 16, 2013

First quarter 2013 (1Q'13) operating results for The Goldman Sachs Group, Inc.
(Goldman) were generally in line with expectations: solid operating
profitability, conservative liquidity levels and continued growth in the Basel
III capital ratio. These latest results have no rating implications, according
to Fitch Ratings.

Revenues (excluding DVA) were essentially flat when compared to a strong 1Q'12
and 9% above the seasonally weaker 4Q'12 level. Operating profits improved
year-over-year, reflecting efforts to improve operating efficiency. Operating
expenses were well controlled, declining 1% year-over-year and improving as a
percentage of revenues.

Revenues benefited year-over-year from sharply higher investment banking
revenues. Equity and debt underwriting revenues improved in view of healthier
equity markets combined with low absolute interest rates and tight credit
spreads. Advisory revenues remained essentially flat and continue to be
affected by sluggish mergers and acquisitions activity (although there are
signs of a pick-up).

Goldman also posted higher revenues in both investment management and
investing and lending segments. Investing and lending revenues included net
gains in both equity and credit-related positions as well as net interest
income. The contribution from this area tends to be volatile from quarter to
quarter depending on moves in equity markets and credit spreads.

Institutional client services remained the largest contributor to revenues at
over 50% of total. In this segment, revenues were at a healthy level in tandem
with a favorable market environment. Revenues were up strongly from 4Q'12, but
moderately lower year-over-year. Revenues in 1Q'12, particularly in the rates
business, were boosted by a snap back in the European bond markets following
ECB actions. Trading VaR remains subdued reflecting benign market volatility
in recent periods.

Global core excess liquidity, including unencumbered, highly liquid securities
and cash, stood at a healthy $174 billion (18% of total assets) at year-end
and averaged $181 billion during the latest quarter. Liquidity has been
consistently maintained at these conservative levels in recent years. Fitch
believes Goldman will comfortably meet Basel III liquidity requirements.

Under Basel III, Goldman's Tier I common ratio was approximately 9%, compared
with approximately 8% a year ago. Management is targeting approximately a 1%
management buffer above Goldman's G-SIFI buffer of 1.5%. As expected, Basel I
capital ratios were negatively affected by the adoption of revised market risk
capital requirements. Nevertheless, capital ratios remain quite comfortable
under Basel I.

Additional information is available at www.fitchratings.com.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS.
PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK:
HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING
DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S
PUBLIC WEBSITE WWW.FITCHRATINGS.COM. PUBLISHED RATINGS, CRITERIA AND
METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF
CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL,
COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM
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OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN
EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER
ON THE FITCH WEBSITE.

Contact:

Fitch Ratings
Joseph Scott, +1-212-908-0624
Senior Director
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Nathan Flanders, +1-212-908-0827
Managing Director
or
Media Relations:
Brian Bertsch, +1-212-908-0549
brian.bertsch@fitchratings.com