Chief Financial Officer at The Goldman Sachs Group
Thank you, David. Good morning. Let's start with our results on page 2 of our presentation. In the fourth quarter, we generated net revenues of $12.6 billion, net earnings of $3.9 billion, and earnings per share of $10.81. This contributed to our record performance for the year across revenues, earnings, and EPS.
Turning to performance by segment starting on page 3. Investment Banking delivered outstanding results in 2021 with revenues rising almost 60% versus very strong results last year. In the fourth quarter Investment Banking produced its highest quarterly revenues of $3.8 billion. Financial advisory revenues of $1.6 billion were just shy of last quarter's all-time record. We maintained our number one league table position in completed M&A for 2021 as we have for 22 of the past 23 years and participated in over $1.8 trillion of announced transactions during the year, driving a volume market share of 31%. M&A activity remains elevated across geographies and industry groups with particular strength in TMT, industrials, and healthcare. We are also optimistic around the forward outlook for M&A with continued strength in corporate confidence coupled with an accelerated pace of transformation across industries. This is further bolstered by high levels of investable capital from financial sponsors.
In equity underwriting, we produced our 5th consecutive quarter with revenues in excess of $1 billion. We ranked number one globally for the year with volumes of roughly $140 billion across more than 700 deals, representing volume market share of 10%. In debt underwriting, net revenues were $948 million with our strong performance supported by record industry leveraged finance volumes as well as solid asset-backed activity. We start the year with an Investment Banking backlog that is significantly higher than where we started 2021 despite record revenues during the year.
Moving to Global Markets on page 4. Segment net revenues were $4 billion in the quarter, down 7% year on year. Full year revenues of $22 billion rose 4%, driven by an increase in equities which posted its best annual results since 2008. Equities performance was helped by our continued progress in deepening our relationships with the top 100 clients as well as higher financing revenues, consistent with our growth strategy.
Turning to page 5. Our FICC businesses generated $1.9 billion of net revenues for the fourth quarter. The decline in FICC intermediation versus a year ago was largely the result of significantly lower revenues and rates products amid lower market-making opportunities, as well as in credit primarily on decreased activity. These declines were partially offset by strong revenues and currencies on solid market-making results and as a divergence in global central bank policies led to higher client activity, particularly in emerging markets. FICC financing revenues of $559 million were up meaningfully year on year driven by mortgage lending balances, consistent with our strategy to support the financing needs of clients across the franchise. Total equity revenues of $2.1 billion were down 11% versus solid results in the fourth quarter of 2020, as an increase in equities financing was more than offset by a decline in intermediation. Average balances in prime rose to a new record, though financing revenues of $819 million were lower sequentially in the absence of outsized opportunities to extend liquidity to clients as mentioned last quarter. Equities intermediation revenues fell year on year driven by significantly lower performance in both derivatives and cash amid fewer market-making opportunities.
Moving to Asset Management on page 6. Fourth quarter segment revenues were $2.9 billion and for the full year asset management generated record revenues of $14.9 billion, helped by significant gains in equity investments, particularly in the first half of the year. Fourth quarter management and other fees totaled $739 million, which were burdened by, approximately, $155 million of fee waivers on our money market funds. As rates rise in the U.S., we expect the majority of these waivers to cease. Equity investments produced net revenues of $1.4 billion, driven by over $1.3 billion in gains on our $15 billion private investment portfolio and roughly $570 million in operating revenues and gains related to CIEs, partially offset by $500 million of losses on our $4 billion public portfolio.
Moving ahead to page 8. We show the continued progress in harvesting on-balance sheet equity investments, consistent with our long-term strategy to reduce capital in this segment and increase fee-related earnings. Since we laid out this plan at the beginning of 2020, we have actively harvested positions of $18 billion, which have been partially offset by markups on the portfolio of $9 billion and additions of $6 billion, which include early fund facilitation. The implied capital associated with the total dispositions across both private and public equity positions since our 2020 Investor Day is nearly $10 billion. Additionally, we continue to have line of sight on $1.5 billion of incremental private asset sales corresponding to $1 billion of capital reduction.
Moving to page 9. Consumer and Wealth Management produced revenues of $2 billion in the fourth quarter contributing to record full-year revenues of $7.5 billion that rose 25% versus the prior year. In Wealth Management, quarterly management and other fees rose to a record of $1.3 billion, up 5% versus the third quarter and 24% year on year, supported by strong client inflows. private banking and lending net revenues of $293 million for the quarter contributed to record full-year results of $1.1 billion, which were helped by increased loan penetration with our ultra-high-net-worth clients. Consumer banking revenues were $376 million in the fourth quarter, reflecting higher credit card loan and deposit balances year over year. Sequential results were impacted by higher interest expense on our U.K. deposits where we raised rates ahead of the Bank of England rate increase. As David mentioned, we now have over 10 million customers across our global consumer platform, up roughly 60% versus last year and gross loan balances are up by almost 50%. We expect loan growth to continue in 2022 given the pending acquisition of GreenSky and the recent launch of the My GM Rewards card.
Page 10 shows the growth in our firmwide assets under supervision and management and other fees, which is a key component of our forward strategy. As David mentioned, total AUS stands at a record $2.5 trillion, following record long-term net inflows of $130 billion during the year, strengthening our position as a top five active asset manager and a top five alternative asset manager globally. Firmwide management and other fees for the fourth quarter rose 14% year-over-year to a record $2 billion, contributing to full-year management and other fees of $7.6 billion. Importantly we've been able to grow these fees at a 7% compounded annual growth rate over the last three years. This fee income is a key component of our strategy to diversify our business mix and deliver more durable revenues for shareholders.
On page 11 we address net interest income and our lending portfolio across all segments. Total firmware NII was $1.8 billion for the fourth quarter, higher versus a year ago reflecting lower funding expenses, including a greater reliance on deposits and an increase in interest earning assets. As we've noted previously, our business is modestly asset sensitive. We expect that higher rates in 2022 along with the continued expansion of interest earning assets will provide a net benefit to our results. Our total loan portfolio at quarter end was $158 billion, up $15 billion sequentially and $42 billion for the full year. The growth in our loan book this year primarily reflects higher balances in conservatively structured warehouse lending where our typical loan-to-value is 50% and an increase in high-quality wealth management loans. Provision for credit losses of $344 million reflected lending growth during the quarter, primarily in Apple Card as we expand our consumer business. We expect the provision to grow next year reflecting increased lending and financing activities across the firm.
Turning to expenses on page 12. Our total quarterly operating expenses were $7.3 billion. For the full year, operating expenses were $32 billion, driving an efficiency ratio of roughly 54%, well below our 60% target and reflecting our ability to exhibit operating leverage. On compensation, our philosophy remains to pay for performance, and we are committed to rewarding top talent in a competitive labor environment. Our full-year compensation ratio, net of provision of 30%, is 200 basis points lower than 2020. Quarterly non-compensation expenses of $4 billion rose year over year as we continued to invest across the franchise to accelerate the strategic evolution of the firm. Nearly two-thirds of the increase was driven by higher professional fees, technology spend, and market development related costs. We also incurred $182 million of expenses related to litigation during the quarter.
Turning to capital on slide 13. Our common equity tier 1 ratio was 14.2% at the end of the fourth quarter under the standardized approach, up 10 basis points sequentially. In the quarter, we returned a total of $1.2 billion to shareholders, including common stock repurchases of $500 million and nearly $700 million in common stock dividends. We also adopted SA-CCR in the fourth quarter which impacted our CET1 ratio by 30 basis points as noted on the last earnings call. Looking ahead, we expect further pressures on our capital position, including the upcoming closing of the NNIP acquisition and other deployment opportunities. Given these headwinds, we currently expect buybacks in the first quarter to be at or around the levels in the fourth quarter. As it relates to our funding plan, based on current expectations, we intend to issue materially less benchmark debt for this year versus 2021, though we will remain dynamic with respect to business needs and market opportunities.
In conclusion, our solid fourth quarter and record 2021 results reflect the strength of our client franchise and our successful strategic execution as well as the upside inherent in our business model amid a constructive operating environment. As David noted, we look forward to providing you with an update next month with more detail around our strategic objectives and targets. Importantly our results bolster our confidence that the execution of our strategic plan will diversify our business mix and drive more durable revenues for shareholders.
With that, we'll now open up the line for questions.