⚠ A Tax Benefit in the First-Half ReturnLow threat

Goldman Sachs (GS) — threat to the moat

A tax benefit from share awards added almost two points to Goldman's first-half return.

Part of Goldman's first-half 2026 return came from the tax line. The firm recorded a tax benefit of about $965 million from the settlement of share-based awards, which lifted diluted earnings per share by about $3.15 and annualised return on equity by 1.7 percentage points1. The effective tax rate was 18.5% for the half, and 13.2% in the first quarter2, against 21.4% for 20253.

Effective tax rate (%)21.4%202513.2%Q1 202618.5%H1 2026Goldman Sachs Q4 2025 and Q2 2026 earnings releases
A lower tax rate in 2026.

Without the benefit, first-half ROE of 21.7%4 would have been nearer 20.0%5. That is still well above target, so the benefit changes the size of the beat, not its direction.

The benefit showed up in the tax line of the half. The provision for taxes was $2,791 million on pre-tax earnings of $15,049 million, against $2,144 million on $10,605 million a year earlier6. Earnings grew 42% before tax and 45% after it7.

The benefit depends on the share price at vesting, and the price has since fallen: shares closed at $935.45 on 25 September 2026, against a 52-week high of $1,153.998. A lower price at the next vesting date means a smaller benefit.

Tax benefits of this kind depend on the share price when awards vest. A rate back above 21% in the second half would show the underlying return without the help.

References
  1. ReportedThe firm recorded a tax benefit of about $965 million from the settlement of share-based awards, which lifted diluted earnings per share by about $3.15 and annualised return on equity by 1.7 percentage points.
    Goldman Sachs second-quarter 2026 earnings results, Form 8-K exhibit 99.1 - segment and line revenues for the quarter and half, earnings, balance sheet, capital, VaR, assets under supervision and the dividend increase - balance sheet, capital, risk, provisions, headcount and capital returned. — Q2 2026 · publ. 14 July 2026 · source ↗
  2. ReportedThe effective tax rate was 18.5% for the half, and 13.2% in the first quarter, against 21.4% for 2025.
    Goldman Sachs second-quarter 2026 earnings results, Form 8-K exhibit 99.1 - segment and line revenues for the quarter and half, earnings, balance sheet, capital, VaR, assets under supervision and the dividend increase - balance sheet, capital, risk, provisions, headcount and capital returned. — Q2 2026 · publ. 14 July 2026 · source ↗
  3. ReportedThe effective tax rate was 18.5% for the half, and 13.2% in the first quarter, against 21.4% for 2025.
    Goldman Sachs full-year and fourth-quarter 2025 earnings results, Form 8-K exhibit 99.1 - net revenues by region, net interest income, deposits, loans, AUS rollforward, capital returned and Apple Card effects. — FY2025 · publ. 15 January 2026 · source ↗
  4. ReportedWithout the benefit, first-half ROE of 21.7% would have been nearer 20.0%.
    Goldman Sachs second-quarter 2026 earnings results, Form 8-K exhibit 99.1 - segment and line revenues for the quarter and half, earnings, balance sheet, capital, VaR, assets under supervision and the dividend increase - firm results: net revenues, earnings, EPS, returns and costs. — Q2 2026 · publ. 14 July 2026 · source ↗
  5. Moat Explorer calcWithout the benefit, first-half ROE of 21.7% would have been nearer 20.0%.
    Moat Explorer calculation from Goldman Sachs' reported figures ($ millions unless stated; calendar years). Growth: net revenues 2025 58,283 / 53,512 - 1 = 8.9%, about 9%; 2022 47,365 / 59,339 - 1 = -20.2%; net earnings 2022 11,261 / 21,635 - 1 = -47.9%, nearly half; pre-tax earnings 21,852 / 10,739 = 2.03 times, about double; compensation 18,906 / 16,706 - 1 = 13.2%; total operating expenses 37,544 / 33,767 - 1 = 11.2%; preferred dividends 876 / 751 - 1 = 16.6%; CEO pay 47 / 39 - 1 = 20.5%; equities 16,535 / 11,549 - 1 = 43.2%; FICC 14,522 / 12,150 - 1 = 19.5%; FICC intermediation 10,271 / 9,318 - 1 = 10.2%; FICC financing 4,251 / 2,832 - 1 = 50.1%; Global Banking & Markets 41,453 / 29,994 - 1 = 38.2%; GBM pre-tax 17,574 / 11,000 - 1 = 59.8%; advisory 4,726 / 3,299 - 1 = 43.3%; underwriting (1,784 + 2,829) / (1,153 + 1,763) = 4,613 / 2,916 - 1 = 58.2%; investment banking fees 9,339 / 6,215 - 1 = 50.3%; 9,339 - 6,215 = 3,124, about $3.1 billion; Q2 2026 pace 3,395 x 4 = 13,580, 13,580 / 9,339 = 1.45; financing 11.45 / 6.03 = 1.90, close to double; intermediation best/worst 19.6 / 15.8 = 1.24; equity underwriting Q2 985 / 428 - 1 = 130%; H1 2026 equities 12,742 / 8,493 - 1 = 50%. Assets under supervision: 4,041 / 3,606 - 1 = 12.1% (six months); 3,606 / 3,137 - 1 = 15.0%; Q2 2026 rise 4,041 - 3,650 = 391 = inflows 230 + appreciation 161; management and other fees 11,538 / 10,415 - 1 = 10.8%; historical principal investments 9.4 - 6.0 = 3.4 billion; alternatives target 750 - 459 = 291 billion, 291 / 4.5 = 64.7, about 65 a year; 291 x 0.58% = 1.69 billion, about 1.7 billion; Shell mandate 40 / 4,041 = 1.0%; AWM ROE 12.5 + 2.3 = 14.8, near 15%. Shares of revenue: GBM 15,520 / 20,338 = 76.3% (Q2 2026), 41,453 / 58,283 = 71.1% (2025), 29,994 / 46,254 = 64.8% (2023); AWM 16,679 / 58,283 = 28.6% (2025), 16,316 / 53,512 = 30.5% (2024), 14,202 / 46,254 = 30.7% (2023), 4,597 / 20,338 = 22.6% (Q2 2026); equities 7,416 / 15,520 = 47.8% of the segment in Q2 2026; advisory 4,726 / 58,283 = 8.1%; GBM pre-tax 17,574 / 21,852 = 80.4%; FICC plus equities 14,522 + 16,535 = 31,057; Q2 2026 financing 1,216 + 3,259 = 4,475; durable revenues 26.3 / 58.283 = 45.1% (2025), 12.2 / 36.546 = 33.4% (2019); GBM assets 1,582,670 / 1,809,320 = 87.5%; brokered and sweep deposits (47 + 34) / 501 = 16.2%; compensation 18,906 / 37,544 = 50.4% of operating expenses; preferred dividends 876 / 17,176 = 5.1% of net earnings; financing against alternatives fees 11.45 / 2.37 = 4.8, about five times. Margins: GBM pre-tax margin 17,574 / 41,453 = 42.4% (2025), 11,000 / 29,994 = 36.7% (2023); AWM 4,127 / 16,679 = 24.7% (2025), 4,865 / 16,316 = 29.8% (2024), 1,763 / 14,202 = 12.4% (2023). Balance sheet and capital: total assets 2,128 / 1,675.972 - 1 = 27.0% (end-2024 to June 2026); equity 121,996 to about 123,000, almost unchanged; deposits 558 / 433 - 1 = 28.9%, about 29%; loans to deposits 261 / 558 = 46.8%, about 47%; JPMorgan deposits 2,559,320 / 501,000 = 5.1 times; CET1 headroom 12.9 - 11.4 = 1.5 points, about 150 basis points; a repeat of the first-half fall 12.9 - (14.3 - 12.9) = 11.5%; basic shares 298.4 / 322.9 - 1 = -7.6%, about 8% fewer; TBVPS 335.49 / 316.02 - 1 = 6.2%; buyback price 935.45 / 984.57 - 1 = -5.0%; first-half ROE 21.7 - 1.7 = 20.0%; Platform Solutions pre-tax losses 783 + 1,047 + 1,989 + 2,175 + 1,075 = 7,069, about $7.1 billion. Valuation: trailing twelve months to June 2026 net revenues 58,283 - 29,645 + 37,565 = 66,203; net earnings 17,176 - 8,461 + 12,258 = 20,973; diluted EPS 51.32 - 25.07 + 38.51 = 64.76; P/E 283,220 / 20,973 = 13.5; P/S 283,220 / 66,203 = 4.28; year-end P/E 263.64 / 17.176 = 15.35 (2025), 179.75 / 14.276 = 12.59 (2024), 125.80 / 8.516 = 14.77 (2023), 128.08 / 21.635 = 5.92 (2021); 52-week high 935.45 / 1,153.99 - 1 = -18.9%, about 19% below; Morgan Stanley gap 308.32 - 283.22 = 25.1 billion; market value on basic shares 298.4 x 935.45 = 279.1 billion. Further: Platform Solutions provisions against revenue (old basis) 1,728 / 1,502 = 115% (2022), 1,135 / 2,378 = 47.7%, about 48% (2023), 1,540 / 2,427 = 63.5%, about 63% (2024); 2021 to 2022 revenue fall 59,339 - 47,365 = 11,974, about $12 billion; Q2 2026 equities less Q1 7,416 - 5,326 = 2,090; AWM revenue 2025 16,679 / 16,316 - 1 = 2.2%; liquidity products 1,065 / 4,041 = 26.4%, about a quarter; AUS year on year 4,041 / 3,293 - 1 = 22.7%, about 23%; alternatives 459 / 2,976 = 15.4% of long-term AUS; private banking and lending H1 2026 638 + 689 = 1,327, x 2 = 2,654, near $2.7 billion; VaR factors before diversification 82 + 65 + 19 + 30 = 196; GBM Q1 2026 12,738 / 17,227 = 73.9%, about 74%; transaction banking and private bank deposits (70 + 101) / 501 = 34.1%, about a third; GBM assets share 87.5%, nearly nine-tenths; EMEA 2025 14,155 / 12,250 - 1 = 15.6%, about 16%; unsecured long-term borrowings 285,500 / 242,634 - 1 = 17.7%, about 18%; JPMorgan deposits 2,559,320 / 2,406,032 - 1 = 6.4%; Goldman deposits 501 / 433 - 1 = 15.7%, about 16%; H1 2026 financing 2,278 + 5,867 = 8,145; Q2 2026 compensation 6,104 / 4,685 - 1 = 30.3%; diluted shares 321.4 / 306.5 - 1 = 4.9%, about 5%; advisory 2025 4,726 / 3,534 - 1 = 33.7%, about 34%; underwriting 2025 (1,784 + 2,829) / (1,677 + 2,521) = 4,613 / 4,198 - 1 = 9.9%, about 10%; debt share of underwriting 2,829 / 4,613 = 61.3%, about three-fifths; wealth channel 1,041 / 862 - 1 = 20.8%, about 21%; CET1 ratio 101,657 / 790,640 = 12.86%; 101,657 / 800,640 = 12.70%, so 10 billion of RWAs costs about 16 basis points; GBM pre-tax Q2 2026 7,499 / 4,075 - 1 = 84.0%; market value 2025 263.64 / 179.75 - 1 = 46.7% - valuation, balance sheet, capital and cost arithmetic. — FY2019-Q2 2026 · publ. September 2026 · source ↗
    Method: Arithmetic on figures reported in Goldman Sachs' Forms 10-K and 10-Q, its earnings releases and presentations, JPMorgan's Form 10-K and market data; operands shown in the source line.
  6. ReportedThe provision for taxes was $2,791 million on pre-tax earnings of $15,049 million, against $2,144 million on $10,605 million a year earlier.
    Goldman Sachs second-quarter 2026 earnings results, Form 8-K exhibit 99.1 - segment and line revenues for the quarter and half, earnings, balance sheet, capital, VaR, assets under supervision and the dividend increase - balance sheet, capital, risk, provisions, headcount and capital returned. — Q2 2026 · publ. 14 July 2026 · source ↗
  7. ReportedEarnings grew 42% before tax and 45% after it.
    Goldman Sachs second-quarter 2026 earnings results, Form 8-K exhibit 99.1 - segment and line revenues for the quarter and half, earnings, balance sheet, capital, VaR, assets under supervision and the dividend increase - balance sheet, capital, risk, provisions, headcount and capital returned. — Q2 2026 · publ. 14 July 2026 · source ↗
  8. ReportedThe benefit depends on the share price at vesting, and the price has since fallen: shares closed at $935.45 on 25 September 2026, against a 52-week high of $1,153.99.
    Goldman Sachs (GS) market data - $935.45 at the close on 25 September 2026, market value $283.22 billion, trailing P/E 14.47, forward P/E 13.76, 52-week range $740.01-$1,153.99, dividend $20.00 (2.14%), analyst target $1,141.65, IPO on 3 May 1999. — September 2026 · publ. 25 September 2026 · source ↗
Sources
Generated September 28, 2026