Stephen M. Scherr
Chief Financial Officer at The Goldman Sachs Group
Thank you, David. Good morning to all of you on the call. Before I turn to the results, let me say briefly that I have thoroughly enjoyed the opportunity to work closely with all of you, our shareholders and the analyst community, over the past three years as CFO, and I am committed to facilitating a smooth handoff to Dennis, who as Carey noted, has joined us on the call today.
On our results, let me begin with our business performance by segment, starting on Page 4. I'm pleased to start with Investment Banking, which has continued to experience strong momentum and produced its second highest quarterly net revenues of $3.7 billion. The consistency of performance in investment banking is a reflection of both elevated market activity and increased market share in a client that has long enjoyed a leading competitive position.
Financial advisory revenues of $1.6 billion were an all-time high. We maintained our number one league table position for the year-to-date, participating in $1.4 trillion of announced transactions with a volume market share of 32%. M&A activity was elevated across geographies and industry groups, with particular strength in TMT and health care and benefited from our strategic footprint expansion and our significant position with financial sponsors who remain exceptionally active in the market.
Underwriting results were strong, notwithstanding more normalized activity relative to the very robust levels in the first half. Equity underwriting generated $1.2 billion in revenues, representing our fourth consecutive quarter with revenues in excess of $1 billion. We ranked number one globally in equity underwriting for the year-to-date with volumes in excess of $110 billion across 570 deals. That represents volume market share of 10%.
In debt underwriting, net revenues were $726 million, with performance supported by solid high-yield and investment-grade issuance as well as acquisition financing activity. Given the current levels of M&A announcements and continued healthy activity among financial sponsors, we expect acquisition financing activity to remain high. Despite significant levels of completed transactions, our Investment Banking backlog, nonetheless, ended the quarter significantly higher than year-end levels.
Corporate lending results of $152 million reflected revenues from transaction banking, middle market lending and the relationship loan book, including associated hedges. In Transaction Banking, we achieved our five-year goal of $50 billion in deposits this quarter, well ahead of the target date.
As a key growth initiative for the firm with a very large addressable market, we continue to successfully access the breadth of our corporate client base in adding customers and driving higher engagement on the platform, which has exceeded expectations. We remain confident in the longer-term revenue target for this business of $1 billion.
Moving to Global Markets on Page 5. Segment net revenues were $5.6 billion in the quarter, 23% higher year-on-year, driven by healthy client activity, notably in Equities, and a generally supportive market-making environment, characterized by heightened volatility in certain areas.
Results were also supported by recent market share gains across FICC and Equities. Global Markets again produced returns in excess of the target ROE expressed at our Investor Day, reflecting the strength of our franchise and ongoing attention to cost.
Turning to Page 6. Our FICC businesses generated $2.5 billion of net revenues for the third quarter. The decline in FICC intermediation versus a year ago was the result of lower revenues in rates, credit and mortgages, offset by materially better performance in commodities and higher results in currencies.
Activity increased into the end of the quarter with September proving to be a very strong month. Our commodities business continued to perform well amidst the heightened level of volatility in the business, including in oil, natural gas and power.
FICC financing revenues of $513 million were the best in over a decade and were up meaningfully, driven by mortgage lending, consistent with our strategy.
Total Equities revenues of $3.1 billion were very strong, helped by higher results in equities intermediation amid better performance in both derivatives and cash and record equities financing as we saw record average balances in prime and opportunities to extend liquidity to clients.
Moving to Asset Management on Page 7. In the third quarter, we generated revenues of $2.3 billion. Management and other fees totaled $724 million, which were impacted by approximately $155 million of fee waivers on our money market funds. We again extended these waivers for clients, consistent with industry practice in this low-rate environment.
Equity investments produced net revenues of $935 million amid $1.6 billion of gains on our $16 billion private investment portfolio, plus our consolidated investment entities, partially offset by $820 million in losses on our $4 billion public portfolio. Losses in the public portfolio were dominated by a few positions, which, by contrast, were material contributors to gains in the segment last quarter. Additionally, we had operating revenues of roughly $200 million related to our CIE portfolio.
Staying with Asset Management, Page 8, again, provides disclosure on the composition of our equity and debt positions by vintage, region and, where relevant, accounting treatment. On Page 9, we show a longer time series of disclosure regarding the progress made in harvesting our on-balance sheet investments. Since our 2020 Investor Day, we have actively harvested positions of $16 billion. which have been partially offset by markups on the portfolio of $9 billion and additions of $5 billion, which include early fund facilitation and other commitments.
The implied capital associated with total dispositions across both private and public equity positions since our 2020 Investor Day is approximately $8 billion. We continue to have line of sight on $2.8 billion of incremental private asset sales corresponding to $2 billion of capital reduction. We remain focused on the execution of this strategy and meeting our capital target for the segment. To this end, we sold over $1 billion of CIE portfolio during the quarter and also disposed of $2 billion of private positions.
Moving to Page 10. Consumer and Wealth Management produced record revenues of $2 billion in the third quarter. In Wealth Management, very strong long-term fee-based inflows for the year-to-date helped drive record management and other fees of $1.2 billion, which rose 10% versus the second quarter and 28% year-on-year. Incentive fees of $121 million largely reflected the recognition of overrides in certain of our investment funds.
Private banking and lending revenues of $292 million rose 12% with loans to private wealth clients up $2 billion sequentially, as demand for lending products remains high amid the low-rate environment.
I would add that we view private bank lending as an integral part of our wealth offering with room for further growth based on the needs of our clients and our current penetration rates as well as the strong credit standing of this client base.
Consumer Banking revenues were $382 million in the quarter, reflecting higher credit card loans and deposit balances year-over-year. We expect loan growth to accelerate in 2022, given the pending acquisitions of GreenSky and the General Motors credit card portfolio and continued expansion in our existing product set.
Looking across these two segments, Page 11 shows our firm-wide assets under supervision and management and other fees. We have been building these businesses steadily and total AUS now stands at a record $2.4 trillion, putting us in the top five of both active managers and alternative asset managers globally. This growth has driven higher firmwide management and other fees, which rose 16% year-over-year to a record $1.9 billion.
On Page 12, we address net interest income and our lending portfolio across all segments. Total firm-wide NII was $1.6 billion for the third quarter, higher versus a year ago, reflecting lower funding expenses and an increase in interest-earning assets. Our total loan portfolio at quarter end was $143 billion, up $12 billion sequentially, reflecting increases across the portfolio. Corresponding provision for credit losses of $175 million reflected portfolio growth.
On Page 13, you see our total quarterly operating expenses of $6.6 billion. Our efficiency ratio for the year-to-date stands at 52.8%, reflecting our ability to exhibit operating leverage while maintaining a pay-for-performance culture and investing for growth. Our year-to-date non-compensation expenses were down 17% but up 11% ex-litigation, while our compensation expenses were up 34% on a year-to-date basis.
Turning to capital on Slide 14. Our common equity Tier 1 ratio was 14.1% at the end of the third quarter, under the standardized approach, down 30 basis points sequentially. Despite higher capital on solid earnings generation, the decline was driven largely by a $43 billion increase in RWAs, partially reflecting revisions to RWA calculations based on regulatory feedback in the quarter.
In the quarter, we returned a total of $1.7 billion to shareholders, including common stock repurchases of $1 billion and $700 million in common stock dividends. Consistent with our capital management philosophy, we will prioritize deploying capital for our client franchise at attractive returns and then return any excess to shareholders via dividends and share repurchases.
In conclusion, we delivered another quarter of strong performance, reflecting the diversification and strength of our client franchise. Additionally, we announced two acquisitions that will enhance both our Asset Management and Consumer businesses and increased the firm's recurring revenue stream.
Looking forward, the overall opportunity set remains attractive across the firm as we continue to execute on our strategy where we are building towards a path to sustainable mid-teens returns.
With that, we'll now open up the line for questions.